Post Office Schemes vs Bank FD: When it comes to saving, security is the top priority for small investors. They are concerned about where to invest their hard-earned money to achieve high returns without the risk of losing it.
Both post offices and banks are generally viewed as safe options in terms of security, as the government guarantees their safety. Additionally, the returns are assured. But if you’re wondering which option is superior, this information is for you to consider.
Post Office
Post Office savings schemes such as PPF, NSC, and MIS come with a sovereign guarantee from the Government of India. This indicates that the government is accountable for the money you deposit in these schemes. This covers both the principal and the interest, making it completely risk-free.
Since it is government-backed, the issue of bankruptcy is not a concern. Whether you deposit 1 lakh or 1 crore, the government is responsible for returning your full amount. This is perfect for individuals who wish to keep a substantial amount, exceeding 5 lakh rupees, in one secure place without any anxiety.
Bank FD
Whether you choose SBI or HDFC, your deposits in other banks are safeguarded by the DICGC (Deposit Insurance and Credit Guarantee Corporation), which is part of the RBI. Amounts up to a maximum of Rs 5 lakh are fully insured and protected. This means that if the bank were to fail tomorrow, you are legally entitled to receive a maximum of Rs 5 lakh back, even if your account holds more than Rs 50 lakh.
Which option is better for you?
If you are looking to securely store a large sum of money, like your retirement savings, the post office is the ideal choice. However, if you have a significant amount of money, you can divide it into Rs 5 lakh portions and deposit it across different banks. This way, your entire corpus will be insured.
Post Office TD VS Government Bank FD
The Post Office TD scheme works similarly to a Post Office FD, where investors invest their money in a lump sum and receive a fixed interest rate. Investors receive a 7.5 percent interest rate on a 5-year Post Office TD. Most public sector banks offer 5-year FDs, however, ranging from 6 to 6.30 percent. The interest rates on 5-year FDs offered by public sector banks are as follows.