Whenever it comes to keeping some money in a safe place, the first name that comes to most people’s mind is bank FD. Especially FD of the same bank where there is already a savings account and daily transactions take place. But is it always a profitable deal to have FD in the same bank just for convenience?
Actually, if you want to keep your money only for 1 year, then Time Deposit of Post Office is an option worth taking a look at. At the same time, another government scheme for senior citizens is offering even higher interest. However, along with high interest, it also has its own conditions.
Where is the interest higher in 1 year FD?
If we compare the current interest rates, 1 year time deposit of post office is giving more interest than 1 year FD of SBI for general customers. For the quarter ending 30 September 2026, 6.90% annual interest is being given on 1 year time deposit of Post Office. Whereas SBI is giving 6.25% annual interest to general customers on FD for tenure less than 1 year to 2 years. That means there is a difference of 0.65 percentage points between the two in a period of 1 year. In simple language, the post office rate for the same amount and same period is currently higher than SBI.
Separate photo for senior citizens
If the investor is a senior citizen, the picture changes slightly. SBI is giving 6.75% annual interest to senior citizens on FD of the same tenure. Accordingly, for senior citizens, the difference between Post Office’s 6.90% and SBI’s 6.75% is only 0.15 percentage points. That is, for general customers, the post office has a higher lead, whereas in the case of senior citizens, the difference in interest between the two reduces significantly.
8.2% interest in SCSS, but there is a catch
Now comes the special Senior Citizen Savings Scheme (SCSS) for senior citizens. Its current interest rate is 8.2% per annum, which is much higher than both the post office’s 1 year time deposit and SBI’s FD. This is why SCSS looks quite attractive just by looking at the interest rate. But here it is important to understand one important thing – SCSS cannot be seen as a 1 year investment. The official duration of this scheme is 5 years. That means, if you want your money back after just 1 year, then choosing SCSS after seeing only 8.2% interest would not be the right decision.
Higher interest does not always mean better
While investing, it is easy to just see which scheme is giving how much interest. But the real question is when will you need money? Suppose you have some amount and you are confident that it will not be needed for the next 5 years. In such a situation, a scheme with higher interest can be considered. But if household expenses, children’s education, medical needs or any big payment have to be made in the next 6 months or 1 year, then locking the money for a long time can create problems. Therefore, investment decision should be taken considering the returns as well as the duration and need of money.
Why did the MBA tea seller raise this issue?
Entrepreneur and CEO of MBA Chai Wala Group, Prafulla Billore, in a post on His question was basically that when some small savings schemes are giving better interest, why should people choose bank FD just out of habit or convenience? Actually, the biggest advantage of bank FD is its easy access. Due to already having a bank account, it is easy for many people to deposit money, create FD and do related work when needed.
Before investing money, definitely ask 3 questions
Before investing money in any FD or small savings scheme, make three things clear – for how long the money has to be kept, whether it may be needed in between and what are the rules on premature withdrawal. Remember, the scheme with the highest interest rate is not the best for every person. If the money is to be kept only for 1 year, then it is more important to choose the option according to the tenure. If you can keep money aside for a long time, then schemes with higher interest can be considered. Therefore, before making FD, it is not enough to just look at the rates of your bank. A better decision can be taken by comparing the post office schemes and the options available for senior citizens.
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