Post Office or Bank FD? More Safe where your money is; Who will guarantee your investment? Know in detail
- Security is the main issue for small investors
- Post Office, Banks both institutions are very safe
Post office schemes vs Bank FD: When it comes to savings, security is the main concern for small investors. Where to invest your hard earned money so that not only good return but also your original investment should be safe which will completely free you from fear. Small investors think the same.
In terms of security, both the Post Office and banks are generally considered very safe options; Because the security of these deposits is guaranteed by the government itself. Moreover, the returns are guaranteed. However, if you are wondering which of these two options is better, then this article will give you the answer.
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Post office
Post Office Savings Schemes such as PPF, NSC and MIS are backed by the Government of India’s ‘Sovereign Guarantee’. This means that the government itself takes the entire responsibility of the funds you deposit in these schemes. As this guarantee applies to both the principal amount and the interest accrued on it, these schemes are considered 100% risk free.
Since these schemes are an integral part of the functioning of the government, there is no question of them going bankrupt. You deposit ₹1 lakh or ₹1 crore; It remains the responsibility of the government to return your entire investment to you. These schemes are an ideal option for individuals who want to invest a large sum of more than ₹5 lakh safely in one place without any financial worries.
Bank Fixed Deposits (FDs)
Be it bank SBI or HDFC, the safety of your deposits in banks is guaranteed by DICGC (Deposit Insurance and Credit Guarantee Corporation) which is a subsidiary of RBI. is given by Under this scheme, the maximum amount up to ₹5 lakh is fully insured and insurance-protected. This means that if a bank goes bankrupt or collapses due to any reason in the future, you are legally guaranteed to get back up to a maximum of ₹5 lakh even if your account actually has more than ₹50 lakh, even if it is safe.
Which option is better for you?
If you want to invest a large amount like your retirement savings in a single and safe place, then ‘Post Office’ is the best option for you. Conversely, if you have a large amount available for investment, you can divide the amount into smaller chunks of ₹5 lakh each, depositing the amount in different banks. This ensures that your entire investment remains safe under insurance protection.
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