SBI Vs Post Office: Where To Open A Fixed Deposit Account In 2022?

SBI Fixed Deposit & Recurring Deposit

The country’s largest lender offers an SBI term deposit scheme, which offers a variety of benefits to investors. A fixed deposit can be made from 7 days to 10 years with a minimum deposit of Rs. 1,000 / – and subsequent deposits in multiples of Rs. 100 / -. There is no maximum limit on the deposit amount, and term deposit accounts can be opened through SBI Net Banking or Mobile Banking.

The bank pays the applicable interest rates on a quarterly basis or at maturity. In the event that term deposits are opened for a maturity period of twelve months or more, interest may be charged at monthly, semi-annual or annual periods at the convenience of the depositor. The bank, on the other hand, offers a recurring deposit product, which allows depositors to make monthly deposits of a fixed amount over a certain period of time.

A recurring deposit account can be opened with a maturity ranging from 12 to 120 months. A minimum recurring deposit of Rs. 100 / – per month is required, followed by deposits in multiples of Rs. 10 / – with no maximum deposit limit. You can also apply for a nominee on an existing fixed or recurring deposit account, as well as transfer your deposit account from one bank branch to another.

It is also possible to take out a loan against a fixed deposit or a recurring deposit account. The interest rates for recurring deposits will be the same as those for term deposits applicable to the general public and to the elderly. The bank’s interest rates for deposits below Rs. 2 crore were last updated on January 8, 2021, and the current interest rates on fixed and recurring deposits are as follows according to the site Web of the bank.

Tenors Revised Tariffs For Public wef 08.01.2021 Revised prices for Seniors wef 08.01.2021
7 days to 45 days 2.9 3.4
46 days to 179 days 3.9 4.4
180 days to 210 days 4.4 4.9
211 days to less than 1 year 4.4 4.9
1 year to less than 2 years 5 5.5
2 years to less than 3 years 5.1 5.6
3 years to less than 5 years 5.3 5.8
5 years and up to 10 years 5.4 6.2
Post office term deposit system

Post office term deposit system

The Post Office offers a postal term deposit (TD) account that works the same way as a bank account. This deposit system requires a minimum deposit of Rs. 1000 / – and multiples of 100, with no maximum deposit limit. The Post Office Term Account can be opened for 1 year, 2 years, 3 years and 5 years, and currently the Post Office offers an interest rate of 5.5% on deposits with a maturity of from 1 to 3 years and 6.7% on deposits at 5 years.

These interest rates are payable on an annual basis, however, they are determined on a quarterly basis. TD investments less than 5 years old are eligible for a tax benefit under Section 80C of the Income Tax Act 1961, as are tax-saving bank deposits. At maturity, the depositor has the option of renewing the TD Account for an additional term beyond the maturity period chosen when opening the account.

A single adult or joint owner, a guardian on behalf of a minor, a guardian on behalf of an insane person or a minor over 10 years of age on behalf of his own name can open a term account and earn the rates of following interest, which are secure as they are backed by the Indian government.

Period Rate
1 year A / c 5.50%
2 years A / c 5.50%
3 years A / c 5.5 0%
5 years A / c 6.7 0%
La Poste recurring deposit account (RD)

La Poste recurring deposit account (RD)

The Post Office also provides a National Recurring Deposit (DR) Savings Account as part of its postal savings plans. The account can be opened with a minimum deposit of Rs. 100 / – per month or any amount in multiples of Rs 10 / – with no upper limit for a period of 5 years and after opening the account it will be eligible for a rate of interest of 5.8% per annum (compounded quarterly).

By submitting a request to the relevant Post Office, the account can be renewed for an additional 5 years. A single person or joint holder, or a guardian on behalf of a minor, a guardian on behalf of an insane person, or a minor over 10 years of age in his name, can create a Post Office RD account.

The account can be opened in cash or by check, the date of deposit being the date of discharge of the check in the event of a check. RD accounts after three years from the account opening date may be closed prematurely.

My opinion

My opinion

The main distinction between an FD post office and an FD bank is that an FD or RD post office can only be opened by Indian citizens, but bank FDs can also be opened by NRIs, NROs and Indian citizens. . Another difference is that you can make a 1-5 year deposit to a postal FD, but bank FDs have a term of 7 days to 10 years, which is a point to consider here.

There is no additional senior benefit available at the post office, but banks pay additional senior interest rates for a term of one year or more. Interest payable on post office term deposits is annual but in banks interest is paid on a quarterly, semi-annual, annual or lump sum basis at maturity which allows you to earn a steady stream of income on FDs. banking.

For regular customers, a post office term deposit is a good bet as SBI interest rates for the general public are lower than post office, while senior citizens should opt for SBI term deposit because they will earn additional interest rates in all tenors.

However, one thing to keep in mind is that post offices do not deduct TDS on interest earned, whereas interest income from bank term deposits is subject to TDS at 10% if PAN is submitted. or 20% if no details of the PAN are submitted to the bank. .

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