Post Office Fixed Deposit: After the Reserve Bank of India (RBI) increased the repo rate from time to time last year, most all banks started increasing the interest rates on FDs. This was the reason that more people were looking at investing in Fixed Deposit (FD) as a good investment option. Banks have been increasing interest rates on FDs since May last year
Post Office Fixed Deposit: After the Reserve Bank of India (RBI) increased the repo rate from time to time last year, most all banks started increasing the interest rates on FDs. This was the reason that more people were looking at investing in Fixed Deposit (FD) as a good investment option. Banks have been increasing interest rates on FDs since May last year. Post Office also gives many options for saving. He is also giving competitive interest rate like FD. In such a situation, it can be difficult to decide whether term deposits in banks or post offices are better. Let’s take a look at what is the difference between bank and post office FDs and what you should keep in mind before investing money.
Rate of interest
Post offices offer interest ranging from 6.8 to 7.5 per cent on different term deposits. Bank FDs, on the other hand, do not have a uniform interest rate. Different banks offer different interest rates on FD schemes. These returns can be higher than FDs from post offices.
Risk factor
Post office schemes are run by the central government, so it is more secure than the bank. Depending on the market conditions, it is a safer investment option than bank FDs. The government insures these schemes. In the case of bank FDs, the main insurer is the bank. RBI insures only deposits up to Rs 5 lakh. Bank FDs are linked to the repo rate of the Reserve Bank of India, which is also exposed to global market fluctuations.
Tax benefits
Tax benefit of up to Rs 1.5 lakh is available on both bank and post office FDs.
Period
Bank term deposits can last from 7 days to 10 years. Post office FD can be up to 5 years only.
Which one to choose between bank and post office FDs
Investors have to keep various points in mind before investing their money in bank FDs. This includes the return on FD and the risk on investment etc.
