SBI FD vs Post Office FD : In today’s time, everyone wants that their hard earned money is safe and they also get good interest on it. Fixed Deposit (FD) is an option in which people deposit their money for a fixed time and get fixed interest on it. Both SBI FD and Post Office FD are very popular in India. It is easy to invest money in both the schemes and the risk is very low. But the question is, which FD scheme gives more profit and in which it will be better for you to invest?
SBI FD vs Post Office FD
If you also want to invest your money in a safe place and are wondering which scheme among SBI Fixed Deposit and Post Office FD is right for you, then this article is for you. Here we will give complete information about the interest rate, tenure, tax benefits, and other important things of both the schemes so that you can take the right decision.
SBI FD vs Post Office FD : Comparison Overview
| Features / Parameters | SBI FD | Post Office FD |
|---|---|---|
| Interest Rate | 6.50% to 7.10% (based on tenure) | 6.90% to 7.50% (based on tenure) |
| Minimum Deposit | ₹1,000 | ₹1,000 |
| Maximum Deposit | No Limit | No Limit |
| Tenure | 7 days to 10 years | 1, 2, 3, 5 years |
| Premature Withdrawal | Allowed (with penalty) | Allowed (with conditions) |
| Tax Benefit | Tax exemption on 5-year FD | Tax exemption on 5-year FD |
| TDS Deduction | Applicable | Not Applicable |
| Account Type | Single / Joint | Single / Joint / Minor |
What is SBI Fixed Deposit (FD)?
SBI FD is a safe investment option in which you deposit your money for a fixed period and the bank gives you fixed interest on it. In SBI Fixed Deposit, you can deposit money for 7 days to 10 years. Here the interest rate depends on the tenure and deposit amount.
- Interest Rate: The interest rate for normal FD in SBI starts from 6.50% and goes up to 7.10%, while Senior Citizens get an additional 0.50% interest.
- Minimum Deposit : You can start from ₹ 1,000.
- Maximum Deposit : There is no limit.
- Premature Withdrawal : You can break the FD if needed, but some penalty is charged.
- Tax Benefit : Tax exemption is available on 5-year Tax Saving FD.
- TDS : If the interest is more than ₹40,000 per annum (₹50,000 for senior citizens) then TDS is deducted.
What is Post Office Fixed Deposit (FD)?
Post Office FD is also called Post Office Time Deposit. It is a government-backed scheme, in which the risk is very low and the interest rate is also good.
- Interest rate : Post Office FD gives 6.90% interest for 1 year, 7.00% for 2 years, 7.10% for 3 years and 7.50% for 5 years.
- Minimum deposit : You can start with ₹1,000.
- Maximum deposit : There is no limit.
- Premature withdrawal : You can withdraw after 6 months, but you will get less interest.
- Tax benefit : Tax exemption is available on 5-year FD.
- TDS: TDS is not deducted in Post Office FD.
Which scheme is better between SBI FD and Post Office FD?
- Talking about the interest rate, Post Office Fixed Deposit gives more interest than SBI FD for 5 years.
- SBI FD has more flexibility, such as opening an account online, auto-renewal, and loan facility.
- Post Office FD has government guarantee, which makes it more secure.
- Tax benefit is available on 5-year FD in both, but TDS is not deducted in post office, which is a big advantage.
SBI FD vs Post Office FD – Pros & Cons
| Aspect | SBI Fixed Deposit | Post Office Fixed Deposit |
|---|---|---|
| ✅ Advantages | – Large banking network – Online facility available – Higher interest for senior citizens | – Backed by government guarantee – No TDS deduction – Higher interest rate |
| ❌ Disadvantages | – TDS is deducted on interest – Interest may be lower than Post Office FD | – Limited online services – No loan facility against FD |
Post Office FD or SBI FD – Which is Better for You?
If you want higher interest and want to avoid TDS, then Post Office FD is better for you. If you want flexibility, banking facility and online option, then SBI FD is a good option. Senior citizens have the benefit of additional interest in SBI Fixed Deposit.
Things to Know Before Investing in Fixed Deposit
- Before investing in both the schemes, definitely check the tenure, interest rate and tax benefits.
- Penalty may be imposed for breaking the FD before time.
- Tax exemption is available only on 5-year FD.
The interest rate may change from time to time, so check the updated rate before investing.
Both SBI FD and Post Office FD are safe and reliable investment options. If your focus is on higher profits and tax benefits, then Post Office Fixed Deposit is better. If you want banking facility, loan facility and flexibility, then you can choose SBI FD.
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