This year, the Reserve Bank of India (RBI) cut the repo rate by a total of 1.00 percent. This decision has directly impacted all public and private banks, resulting in most banks reducing their fixed deposit (FD) interest rates. Despite this, FDs remain a reliable and stable investment option for investors. In the new financial environment, the Post Office’s fixed deposit scheme has surpassed many major banks in the country, achieving the highest interest rate on a 5-year term.
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Post Office
The Post Office’s 5-year fixed deposit currently offers an attractive interest rate of 7.5 percent. This rate is higher than any major public or private bank. The most significant advantage of the Post Office is that it offers the same interest rate to customers of all age groups, providing equal security and returns to both senior and general investors. Due to its stable income and government guarantee, this scheme is becoming increasingly popular among medium- and long-term investors.
SBI
The State Bank of India (SBI) offers 6.05 percent interest on 5-year FDs to general customers, while for senior citizens, the rate goes up to 7.05 percent. However, this interest rate is still lower than the 7.5 percent rate offered by the post office. This interest rate structure of the country’s largest public sector bank indicates that interest rates in the banking sector are under constant pressure.
HDFC Bank
India’s largest private bank by market cap, HDFC Bank, offers its customers interest rates ranging from 6.40 percent to 6.90 percent on 5-year FDs. General customers can earn 6.40 percent, and senior citizens can earn 6.90 percent. This clearly shows that even private sector banks are unable to match the post office’s interest rates.
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PNB
Punjab National Bank offers 6.25 percent interest on 5-year FDs for general customers. The rate is up to 6.75 percent for senior citizens and 7.05 percent for customers over 80 years of age. While these rates are attractive, they are still lower than those offered by post offices. This is why post offices are increasingly becoming the preferred choice for those looking for a safe 5-year investment plan.