This Article is From Jan 04, 2019

Fixed Deposit (FD) Interest Rates: How Returns Offered By SBI, Post Office Compare

The interest rates on fixed deposits (FDs), which are revised from time to time, vary according to the tenor of a fixed deposit.

Fixed Deposit (FD) Interest Rates: How Returns Offered By SBI, Post Office Compare

SBI offers maturity period ranging from seven days to 10 years for fixed deposits.

Fixed deposits (FDs) are secure investment avenue offered by commercial banks, non-banking financial companies, small saving banks and post offices. Also known as term deposits, these accounts offer higher rate of interest than savings accounts. The interest rates on fixed deposits (FDs), which are revised from time to time, vary according to the tenor of a fixed deposit. The government recently revised interest rates on post office fixed deposit scheme for the quarter ending March 31, 2019. Country's largest lender State Bank of India (SBI) last revised its FD interest rates with effect from November 28, 2018.

Here's a comparison of fixed deposits interest rates, other FD features offered by SBI and post office:

Quantum of contribution

The minimum amount that one requires to open a fixed deposit with SBI is Rs 1,000, noted SBI on it's corporate portal- sbi.co.in. The minimum amount required to open a fixed deposit with the post office is Rs 200. However, there is no limit on maximum deposit in both SBI and post office

Maturity

SBI offers maturity period ranging from seven days to 10 years for fixed deposits. Post office FD account offers interest rates across four maturities: one year, two years, three years, and five years. 

Interest rates

SBI's FD account offers payment of interest at monthly/quarterly basis which can be availed as per the investor's requirement. The following FD interest rates are applicable on deposits below Rs. 1 crore, according to the bank's website - sbi.co.in:

TenorsRevised For Public w.e.f. 28.11.2018Revised for Senior Citizens w.e.f. 28.11.2018
7 days to 45 days5.756.25
46 days to 179 days6.256.75
180 days to 210 days6.356.85
211 days to less than 1 year6.46.9
1 year to less than 2 year6.87.3
2 years to less than 3 years6.87.3
3 years to less than 5 years6.87.3
5 years and up to 10 years6.857.35
(Source: sbi.co.in)

In a post office FD account, interest is payable annually but is calculated quarterly. Given below are the FD interest rates offered by post office:

PeriodRate
1yr.A/c7.00%
2yr.A/c7.00%
3yr.A/c7.00%
5yr.A/c7.80%

Transfer of FD account

A post office FD account can be transferred from one post office to another. SBI, on the other hand, offers the flexibility to convert fixed deposit (regular interest payout) to special term deposit (cumulative interest payout) and vice versa.

Premature withdrawal

Premature withdrawal facility is available with SBI's FD account. The interest shall be 0.50 per cent or 1 per cent below the rate applicable at the time of deposits for the period deposit remained with the bank or 0.50 per cent or 1 per cent below the contracted rate, whichever is lower. However, no interest will be paid on deposits which remain for a period of less than 7 days, noted SBI.