For three-five year FDs, POTD offers much better rates than banks. For 5-year POTD, the interest rate is 6.7 per cent while it is 5.7 per cent for HDFC Bank and ICICI Bank. SBI FDs of this tenure fetch an interest rate of 5.45 per cent
Ever since the Reserve Bank of India (RBI) hiked repo rates by 90 basis points since May 2022 in a bid to tame inflation, fixed deposit interest rates have been rising. After suffering decadal low rates during the two pandemic years, banks and NBFCs have started hiking interest rates on FDs.
Among the banks that have increased FD rates for deposits below Rs 2 crore are the State Bank of India, ICICI Bank and HDFC Bank. However, for the July-September quarter, the Centre has decided to keep the interest rates on small savings schemes like the post office term deposit unchanged.
So, with banks hiking their FD interest rates, is it so that they have now caught up with post office term deposit rates? Here’s a comparison to understand this better:
Bank FDs vs post office TD
One-two year FDs: For this duration, public lender SBI offers an interest rate of 5.3 per cent while HDFC and ICICI Bank offer 5.35 per cent interest. On the other hand, One- and two-year POTD comes with an interest rate of 5.5 per cent (for July-September quarter).
Two-three year FDs: ICICI and HDFC Bank offer 5.50 per cent for 2-3 year FDs, which is the same as the Post Office term deposit interest rates. However, SBI offers 5.35 per cent for this tenure.
Three-five year FDs: For this tenure, POTD offers much better rates than banks. For 5-year POTD, the interest rate is 6.7 per cent while it is 5.7 per cent for HDFC Bank and ICICI Bank. SBI FDs of this tenure fetch an interest rate of 5.45 per cent.
Interest rates on all tenures
State Bank of India
The public lender gives rates ranging from 2.90 per cent to 5.50 per cent for terms ranging from 7 days to 10 years.
ICICI Bank
ICICI Bank provides interest rates ranging from 2.75 per cent to 5.75 per cent for terms ranging from 7 days to 10 years.
HDFC Bank
India’s largest private lender offers interest rates ranging from 2.75 per cent to 5.75 per cent for terms ranging from 7 days to 10 years.
Post Office term deposit
Post office term deposits offer interest rates ranging from 5.5 per cent to 6.7 per cent for tenure ranging from one year to 5 years.
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