Fixed deposits (FDs) are highly preferred investments in India, especially in times of high market volatility and economic uncertainty. This is because they are safe, easy to understand, and fairly liquid.


There is no doubt about the relevance of fixed deposits in long-term financial planning. However, you should remember that FDs can be further classified into those provided by NBFCs, banks, and post offices.

Comparative Analysis of Post Office FD vs Bank FD

Post office fixed deposits are similar to those issued by banks, in the sense that you invest money for a predetermined rate and period. Here is a quick comparison between the two investment avenues:

Parameters

Post Office FD

Bank FD

Ease of Investment

Need to open a savings account with India Post to book a Post Office FD online

Can be opened online or offline 

Interest Rates

Comparatively lower than regular FDs 

Higher

Special Interest Rates for Senior Investors

N/A

Yes

Minimum investment 

₹1,000

Minimum amount can vary, depending on the bank

Tenor

Up to 5 years

Up to 10 years

Security

Backed by the Government of India

Up to ₹5 Lakhs insured by DICGC

While trying to determine which is better, remember that both are safe low-risk investments that offer good return on investments. You should also consider factors like the convenience of online banking and ease of operation. 

 

Before making a decision, consider using an FD calculator to compare and determine your potential interest earnings across different tenors and issuers. On Bajaj Markets, compare the FD interest rates offered by different banks and NBFCs and book an FD right away. 

Disclaimer

The information provided by BFDL herein above is related to the Non-Partnered Banks/ NBFCs and is just for the purpose of information and under no circumstances the information provided hereinabove is intended to be source of advice or recommending any financial investment advice or endorsement of any sort. 

The information including interest rates with regard to fixed deposit, provided on this website is gathered through publicly available sources over the internet and is considered as accurate and reliable to the best of our knowledge. BFDL disclaims any responsibility or liability regarding inaccuracies, omissions, mistakes etc. as well as offers by the Non-Partnered Banks. The use of information set out is entirely at the User’s own risk and User should exercise due care prior taking of any decision, on the basis of information mentioned hereinabove. You are advised to visit/ contact the respective Banks/ NBFCs to verify the information before making any investment or opening an account. Further, BFDL does not undertake any responsibility or liability to update this information. YOU ARE SOLELY RESPONSIBLE FOR ANY LIABILITY OR DAMAGE YOU INCUR THROUGH ACCESS TO OR USE OF THE SITE OR SUCH INFORMATION OR MATERIALS EXCEPT WHERE THE LAWS AND REGULATIONS OF A PARTICULAR JURISDICTION CONCERNING WARRANTIES CANNOT BE WAIVED. Additionally, display of any trademarks, tradenames, logo and other subject matters of intellectual property owners. Display of such Intellectual Property along with the related product information does not imply BFDL’s partnership with the owner of the Intellectual Property of such products. 

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Frequently Asked Questions

Is a 5-year post office FD tax-free?

Yes, you can claim an income tax deduction of up to ₹1.5 Lakhs under Section 80C on 5-year post office tax saver FDs.

Can I open a post office fixed deposit from any post office?

You can open a post office savings account in any post office across India. Once that is done, you can invest in a post office fixed deposit from any post office. Else, you can make the investment on the India Post website or mobile app. You can also transfer your account from one branch to another, at any time.

What are the different tenors offered for FDs issued by post offices and banks?

Post office FDs offer a maximum tenor of 5 years, while FDs issued by banks have tenors ranging from 7 days to 10 years.

Are my funds safe in FDs provided by banks?

Regular FDs issued by banks are insured up to ₹5 Lakhs by the Deposit Insurance and Credit Guarantee Corporation (DICGC). 

Can I withdraw early from FDs provided by banks and post offices?

Both allow premature withdrawals with penalties. Generally, penalties are slightly lower for Post Office FDs.

Are there tax benefits on FDs issued by banks and post offices?

Yes. Tax-saver FDs offered by banks are eligible for deductions of up to ₹1.5 Lakhs per financial year u/s 80C of the I-T Act, 1961. Post Office FDs offer a unique exemption up to ₹10,000 u/s 80TTA.

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