Investing in a Fixed Deposit (FD) is one of the safest and most reliable ways to grow your savings over time. If you are considering investing ₹10 lakh for 10 years, choosing the right bank can make a big difference in your returns. Among the top banks in India, State Bank of India (SBI), Punjab National Bank (PNB), and Bank of Baroda (BoB) offer competitive FD interest rates. But which one provides the best returns?
In this article, we will compare FD rates of these three banks, calculate the maturity amount, and help you make an informed investment decision.
SBI Vs PNB Vs BoB: Where Will You Earn More on an FD
| Feature | SBI | PNB | BoB |
|---|---|---|---|
| Interest Rate (10 Years) | 6.50% | 6.50% | 6.50% |
| Maturity Amount (₹10 Lakh FD) | ₹18,77,137.47 | ₹18,77,137.47 | ₹18,77,137.47 |
| Senior Citizen Rate | 7.00% | 7.00% | 7.05% |
| Maturity Amount (Senior Citizens) | ₹19,67,151.34 | ₹19,67,151.34 | ₹19,80,300.57 |
| Compounding Frequency | Quarterly | Quarterly | Quarterly |
| Tax Deducted at Source (TDS) | Yes (If interest exceeds ₹10,000/year) | Yes | Yes |
When it comes to choosing the best bank for a ₹10 lakh FD for 10 years, all three banks—SBI, PNB, and BoB—offer similar interest rates and maturity amounts. However, senior citizens should opt for Bank of Baroda (BoB) as it offers the highest maturity amount of ₹19,80,300.57.
Understanding Fixed Deposits (FDs)
A Fixed Deposit (FD) is a financial instrument where you deposit a lump sum amount in a bank for a fixed tenure at a predetermined interest rate. The interest is compounded periodically, and at the end of the tenure, you receive the principal + accumulated interest.
Why Choose a Fixed Deposit?
- Safety & Security: FDs offer guaranteed returns, making them risk-free investments.
- Better Returns Than Savings Accounts: FDs provide higher interest rates compared to regular savings accounts.
- Flexibility in Tenure: You can choose an FD tenure ranging from 7 days to 10 years.
- Tax Benefits: Certain FDs qualify for tax exemptions under Section 80C of the Income Tax Act.
see also: Post Office FD Scheme If you deposit just this much money, you will get ₹ 21,74,922
SBI vs PNB vs BoB: Interest Rates Comparison
The interest rates offered by SBI, PNB, and BoB for a 10-year FD are as follows:
1. State Bank of India (SBI) FD Rates
- General Citizens: 6.50% p.a.
- Senior Citizens: 7.00% p.a.
- Compounding: Quarterly
2. Punjab National Bank (PNB) FD Rates
- General Citizens: 6.50% p.a.
- Senior Citizens: 7.00% p.a.
- Compounding: Quarterly
3. Bank of Baroda (BoB) FD Rates
- General Citizens: 6.50% p.a.
- Senior Citizens: 7.05% p.a.
- Compounding: Quarterly
FD Maturity Calculation (₹10 Lakh for 10 Years)
To determine which bank offers the best returns, let’s calculate the maturity amount using the formula:
A=P×(1+rn)n×tA = P \times \left(1 + \frac{r}{n}\right)^{n \times t}
Where:
- A = Maturity Amount
- P = Principal (₹10,00,000)
- r = Annual Interest Rate (in decimal form)
- n = Compounding Frequency (4 for quarterly compounding)
- t = Number of Years (10)
Maturity Amounts for General Citizens
- SBI: ₹18,77,137.47
- PNB: ₹18,77,137.47
- BoB: ₹18,77,137.47
Maturity Amounts for Senior Citizens
- SBI: ₹19,67,151.34
- PNB: ₹19,67,151.34
- BoB: ₹19,80,300.57
Which Bank Offers the Best FD Returns?
- If you are a general citizen, all three banks offer the same maturity amount.
- If you are a senior citizen, Bank of Baroda (BoB) offers the highest maturity amount (₹19,80,300.57) due to its slightly higher interest rate of 7.05%.
Tax Implications on FD Interest
- Tax Deducted at Source (TDS): If the total interest earned in a financial year exceeds ₹10,000 (₹50,000 for senior citizens), TDS at 10% is deducted.
- Exemptions: Senior citizens can claim tax deductions under Section 80TTB up to ₹50,000 on FD interest.
see also: Axis Bank Personal Loan You can get a loan of lakhs in this easy way
SBI Vs PNB Vs BoB Where Will You Earn More on an FD FAQs
1. Which bank offers the highest FD rate for 10 years?
All three banks offer 6.50% for general citizens. However, BoB offers 7.05% for senior citizens, which is the highest.
2. How often is interest compounded in SBI, PNB, and BoB?
Interest is compounded quarterly in all three banks.
3. Can I withdraw my FD before maturity?
Yes, but a penalty of 0.5% – 1% on interest rates may apply.
4. How can I avoid TDS on FD interest?
You can submit Form 15G (for non-senior citizens) or Form 15H (for senior citizens) to the bank if your total income is below the taxable limit.
5. Should I split my FD across multiple banks?
Yes, splitting FDs across banks can help reduce TDS deduction and mitigate risk.
