Fixed deposits are one of the most popular investment instruments in India. The categories of people who park a significant portion of their investments in banks FDs include senior citizens, those who have retired from employment and even those who are regularly earning and invest in stock markets and mutual funds too.
If one has a surplus amount of Rs 5 lakh that he/she can park for 3-5 years, the risk averse and retired section of the population would like to put it fixed deposits, or term deposits, of any top bank or the post office, which also offers FDs. In post office they are known as time deposits though. Let’s also check the interest rate on time deposits in post office. Remember 5-year FDs offer income tax benefits.
What is the interest rate in SBI FD and PNB FD
SBI (State Bank of India) offers an interest rate of 6.75% for general citizens and 7.25% for senior citizens on FDs of 3 years and 5 years. However, if you park your funds just 1 day less in both maturity baskets, the interest rates jump to 7% (general customers) and 7.5% (senior citizens respectively). If you do the same in the 5-year maturity FD (invest for 1 day less), you will get rates of 6.75% and 7.25% respectively.
PNB is the only major bank that offers additional interest to both senior citizens and super senior citizens (those above 80 years). PNB pays 7%, 7.5% and 7.8% respectively to general customers, senior citizens and super senior citizens on 3-year FDs. This bank pays 6.5% (general customers), 7% (senior citizens) and 7.3% for super-senior citizens on 5-year FDs.
Rate of interest in HDFC, ICICI, Axis Bank
The rates of interest paid by HDFC Bank on 3-year FD are 7% and 7.5% respectively for general customers and senior citizens. In case of 5-year FDs, the interest paid is the same in HDFC Bank. Significantly, the rates of interest paid by ICICI Bank are identical to those paid by HDFC Bank. However, Axis Bank offers slightly higher rates. Its rates on 3-year FDs are 7.1% and 7.6% respectively, while those on 5-year FDs are 7% and 7.75%.
What is the interest rate in post office FD
FDs in post office are formally known as time deposits. The rate of interest on 3-year FD is 7.1% and that in 5-year FD is 7.5%. Significantly, post office does not pay higher interest rate to senior citizens.
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