Fixed Deposits (FDs) remain one of the safest and most reliable investment options for Indian investors. Whether you are a senior citizen looking for stable returns, a salaried individual aiming for wealth growth, or a conservative investor avoiding market volatility, FDs from the State Bank of India (SBI) and the Post Office offer competitive interest rates. But which one provides the best return for your hard-earned money?
Best Fixed Deposit Schemes in India
| Feature | SBI Fixed Deposit | Post Office Fixed Deposit |
|---|---|---|
| Interest Rate (2025) | 6.50% – 7.00% | 6.90% – 7.50% |
| Best Tenure for High Returns | 2 to 5 years | 5 years |
| Premature Withdrawal | Available with penalty | Limited options |
| Tax Benefits | Up to ₹1.5 lakh under Section 80C (5-year FD) | Same as SBI |
| Senior Citizen Benefits | Extra 0.50% interest | No additional benefits |
| Government Guarantee | Yes (DICGC insured up to ₹5 lakh) | Yes (Govt. backed) |
| Investment Safety | High | Very High (Govt. assured) |
| Maturity Amount (₹2 lakh for 5 years) | ₹2,38,200 – ₹2,50,000 | ₹2,61,500 |
If higher returns and government-backed security are your priorities, go for Post Office FD. If liquidity, online transactions, and flexibility matter more, SBI FD is a better option. For senior citizens, SBI FD offers added benefits with extra interest rates.
Before investing, check the latest rates and calculate your potential returns to make an informed decision.
SBI vs. Post Office FD: Interest Rate Comparison
1. SBI Fixed Deposit Interest Rates (2025)
SBI offers flexible FD tenures ranging from 7 days to 10 years. The interest rates vary based on the deposit period. Here’s the current rate chart for SBI FDs:
| Tenure | Regular Interest Rate | Senior Citizen Interest Rate |
|---|---|---|
| 1 year | 6.80% | 7.30% |
| 2 years | 7.00% | 7.50% |
| 3 years | 6.75% | 7.25% |
| 5 years | 6.50% | 7.00% |
2. Post Office Fixed Deposit Interest Rates (2025)
The Post Office Time Deposit scheme is similar to a bank FD but is backed by the government. Here’s the current rate chart:
| Tenure | Interest Rate |
|---|---|
| 1 year | 6.90% |
| 2 years | 7.00% |
| 3 years | 7.10% |
| 5 years | 7.50% |
Which One Gives Higher Returns?
For a long-term FD (5 years), the Post Office offers a higher interest rate of 7.50% compared to SBI’s 6.50%. However, SBI provides better benefits for senior citizens with an extra 0.50% interest.
see also: You will get ₹20,500 every month in this post office scheme
How Much Will You Earn on a ₹2 Lakh Investment?
1-Year FD Calculation
- SBI: ₹2,13,600 (at 6.80%)
- Post Office: ₹2,13,800 (at 6.90%)
3-Year FD Calculation
- SBI: ₹2,45,600 (at 6.75%)
- Post Office: ₹2,47,800 (at 7.10%)
5-Year FD Calculation
- SBI: ₹2,38,200 (at 6.50%)
- Post Office: ₹2,61,500 (at 7.50%)
Clearly, the Post Office FD yields higher returns, especially for a 5-year tenure.
Which FD Should You Choose? SBI vs. Post Office
When to Choose SBI FD?
If you need flexibility to withdraw funds early (with a penalty)
If you are a senior citizen, since SBI offers extra 0.50% interest
If you prefer higher liquidity and easy online transactions
If you want multiple tenure options beyond 5 years
When to Choose Post Office FD?
If you want higher interest rates, especially for 5-year tenure
If you prioritize government-backed safety over liquidity
If you don’t need to withdraw money before maturity
If you are investing for tax-saving purposes (5-year FD)
see also: SBI PPF Yojana: If you deposit ₹ 60,000, you will get ₹ 16,27,284
FAQs on SBI & Post Office FD
1. Is Post Office FD safer than SBI FD?
Yes, Post Office FD is 100% government-backed, making it slightly safer than SBI FD, which is insured up to ₹5 lakh under DICGC.
2. Can I withdraw my FD early?
- SBI: Yes, but with a penalty
- Post Office: Limited withdrawal options before maturity
3. Which FD is best for senior citizens?
SBI FD is better because it offers an additional 0.50% interest for senior citizens.
4. Is interest earned on FDs taxable?
Yes, interest income is taxable under ‘Income from Other Sources’ as per your tax slab.
5. Can I get a loan against FD?
Yes, both SBI and Post Office FDs allow loans up to 90% of the deposit amount.
