While savings bank accounts are meant for regular savings, FDs and RDs are good for long-term investments, mainly for people who are planning to have savings for retirement.
Post offices in India offer three saving and investment options to customers – recurring deposits (RDs), saving accounts and fixed deposits (FDs). The State Bank of India (SBI) also offers the same options to its subscribers. But which of the two is beneficial for you? While savings bank accounts are meant for regular savings, FDs and RDs are good for long-term investments, mainly for people who are planning to have savings for retirement. The difference between FD and RD is that the former is a one-time investment while the latter requires periodical contributions.
Here is the comparison of interest rates on recurring deposits and fixed deposits of Post Office and SBI:
Post office fixed deposits:
The interest rate is according to the term of the account. For one year the interest rate is 6.60 per cent while for five years the interest rate is 7.40 per cent.
Post office recurring deposits:
Deposits in RD accounts get 6.9 per cent per annum of interest rate. After the account matures, Rs 10 in the account fetches Rs 717.43. The account can be continued for another five years on a year-to-year basis.
State Bank of India (SBI) fixed deposits:
The price is according to the amount below Rs 1 crore. All figures in percentage, according to sbi.co.in:
Existing for Public w.e.f. 28.03.2018
Revised For Public w.e.f. 28.05.2018
Existing for Senior Citizens w.e.f. 28.03.2018
Revised for Senior Citizens w.e.f. 28.05.2018
7 days to 45 days
46 days to 179 days
180 days to 210 days
211 days to less than 1 year
1 year to less than 2 year
2 years to less than 3 years
3 years to less than 5 years
5 years and up to 10 years
State Bank of India (SBI) recurring deposits:
The interest rate on FDs and RDs are the same, according to the SBI website.
Meanwhile, apart from these saving options, post offices offer monthly income scheme account, 15-year public provident find accounts, national saving certificates, senior citizen savings scheme and Kisan Vikas Patra.