SBI FD vs Post Office Time Deposit: Here is how you can double your money in just this period
SBI FD vs Post Office Time Deposit: Tax-saving fixed deposits (FDs) are those that have a tenure of more than 5 years.
SBI FD vs Post Office Time Deposit: Tax-saving fixed deposits (FDs) are those that have a tenure of more than 5 years. As the State Bank of India (SBI) and other Indian banks are decreasing interest rates on fixed deposits, small saving post office schemes can be a lucrative option for any investor. For their information, the post office also offers a time deposit scheme that offers income tax exemption if the deposit is for the period of five years.
If we compare the interest rates given by the SBI for five year fixed deposit and post office time deposit for the period of five years, the difference is 1.3 per cent - SBI gives 5.4 per cent interest on tax-saving FDs while post office time deposit interest rate is 6.7 per cent if the investment period is 5 years. In fact, from April 1 this year, new rates of interest have come into effect in the post office time deposit scheme. The interest rate on 1-year, 2-year and 3-year FDs is 5.5 percent, while the interest rate on 5-year FDs is 6.7 percent.
See Zee Business Live TV streaming below:
So, assuming the same for an investment of Rs 1 lakh in both SBI FD and Post Office Time Deposit Scheme for five years, Rs 1 lakh will become Rs 1,64,362 in SBI FD giving Rs 64,362 as interest after five years.
Source: SBI FD Calculator
Meanwhile if a person has invested the same Rs 1 lakh in Post Office Time Deposit Scheme, his or her Rs 1 lakh will become Rs 2,00,160.
This means money will get almost doubled in the Post Office Time Deposit scheme.
So, being a wise investor, it is always advisable to nurture all investment options and then make an investment decision. Since, the Post Office Scheme is government-backed, your money is safer.
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.