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Post Office Time Deposit vs State Bank of India FD: You may get this with Rs 50000, Rs 100000, Rs 150000, Rs 200000

Rajeev Kumar
sbi vs post office fixed deposit

Post Office vs SBI Fixed Deposit rates: If you are a Fixed Deposit (FD) enthusiast, you may be wondering these days – where to invest? As banks respond to falling interest rates by reducing the interest rates on term, or fixed, or time deposit plans, the choice for depositors are getting narrower. The country’s largest lender, State Bank of India (SBI) once again announced to cut its Fixed Deposit rates for certain tenors on Monday.

The highest interest rate offered by the SBI is now just 6.50 percent on term deposits for 1 to less than 2 years. On deposits for 3 to less than 5 years and 5 to10 years, SBI is offering 6.25 percent interest.

If you are looking for a better and reliable place to open an FD account, and get better returns than SBI, the humble post office near you may provide the answer. Here is a comparison for your consideration:

Post Office Time Deposit Interest Rates

1-year: 7%
2-year: 7%
5-year: 7.7%

SBI Fixed Deposit Interest Rates

1-year: 6.50%
2-year: 6.25%
5-year: 6.25%

Suppose you plan to invest Rs 50,000, Rs 1,00,000, Rs 1,50,000 and Rs 2,00,000 in any of these term plans mentions. Here’s how your money will likely grow in SBI and Post Office*:

SBI Rs 50,000 Rs 1,00,000 Rs 1,50,000 Rs 2,00,000
1-year Rs 53330 Rs 106660 Rs 159990 Rs 213320
2-year Rs 56602 Rs113205 Rs 169808 Rs 226410
5-year Rs 68176 Rs 136353 Rs 204530 RS 272707
Post Office Rs 50,000 Rs 1,00,000 Rs 1,50,000 Rs 2,00,00
1-year Rs 53593 Rs 107186 RS 160779 RS 214372
2-year Rs 57186 Rs 114372 Rs 171558 Rs 228744
5-year Rs 69813 RS 139626 Rs 209439 Rs 279252

(*Calculations done with SBI FD maturity calculator, National Saving Interest Calculator of National Savings Institute)

You can see from the above chart that Post Office term plans will give better returns than SBI fixed deposits or 1, 2 and 5 years respectively.

ALSO READ | How New SBI Fixed Deposit rates will affect your money

Post Office also offers other investment instruments like National Savings Certificates, Kisan Vikas Patra, Senior Citizens Savings Scheme, Monthly Income Scheme, Public Provident Fund etc with interest rates over 7 percent. The interest rates of Post Office small savings schemes are revised quarterly by the government.