Fixed deposit (FDs) accounts of banks and post offices are viable investment options for the risk-averse investors since they offer guaranteed returns. At the same time, depositors also have the option of investing in the tax-saving fixed deposits (FDs) wherein income earned is allowed to be exempted under section 80 (C) of the Income Tax (I-T) Act. Tax-saving FDs, however, keep the capital locked-in for five years, which means that subscribers cannot access their money from these term deposits for a period, which is shorter than five years.
(Also Read: What Utkarsh Small Finance Bank, SBI, ICICI Bank, HDFC Bank Offer As FD Interest Rates)
However, the regular fixed deposits offered by banks and post offices allow premature withdrawal facility, but do not enable tax saving.
Given below is a comparison of interest rates offered by State Bank of India (SBI) and India post:
Fixed deposit interest rates of SBI
SBI, the largest lender of the country, revised interest rates on FDs in the month of March. On deposits of less than Rs 1 crore, SBI offers interest rates ranging from 5.75 per cent to 6.75 per cent on fixed deposits of up to 10 year tenure. Interest rates for senior citizens are marginally higher by 20-50 basis points.
(Also Read: Five Investment Schemes That Can Make You Money, Offer Security)
SBI fixed deposit accounts can be maintained with a minimum balance of Rs 1,000. There is no maximum cap on the amount that can be invested in fixed deposit accounts of SBI.
(All figures in % per annum)
| Tenors | Existing for Public w.e.f. 28.02.2018 | Revised For Public w.e.f. 28.03.2018 | Existing for Senior Citizens w.e.f. 28.02.2018 | Revised for Senior Citizens w.e.f. 28.03.2018 |
| 7 days to 45 days | 5.75 | 5.75 | 6.25 | 6.25 |
| 46 days to 179 days | 6.25 | 6.25 | 6.75 | 6.75 |
| 180 days to 210 days | 6.35 | 6.35 | 6.85 | 6.85 |
| 211 days to less than 1 year | 6.4 | 6.4 | 6.9 | 6.9 |
| 1 year to less than 2 year | 6.4 | 6.4 | 6.9 | 6.9 |
| 2 years to less than 3 years | 6.5 | 6.6 | 7 | 7.1 |
| 3 years to less than 5 years | 6.5 | 6.7 | 7 | 7.2 |
| 5 years and up to 10 years | 6.5 | 6.75 | 7 | 7.25 |
| Period | Rate |
| 1yr.A/c | 6.60% |
| 2yr.A/c | 6.7% |
| 3yr.A/c | 6.90% |
| 5yr.A/c | 7.40% |
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