FD Return: Post Office schemes outperform bank FDs, offering higher interest rates and income tax exemptions..

This year, the Reserve Bank of India (RBI) has reduced the repo rate several times. Consequently, many banks have reduced the interest rates on their fixed deposit (FD) schemes. Consequently, new FD investors are now investing at lower rates. At a time when FD interest rates are falling, many post office small savings schemes are offering higher interest rates than those offered by many major banks. FD interest rates at most major banks range between 6% and 7%. Several post office schemes offer interest rates above 7%. Many of these schemes also offer income tax exemptions on deposits under the old tax regime.

Higher Interest Rates on These Schemes
Post office small savings schemes are offering better returns than fixed deposit schemes at many major banks. The government changes the interest rates on post office schemes every quarter. The current interest rate is valid until December 31st. These post office schemes offer 7% or more interest:

If you want to deposit money for 2 years, you'll earn 7% annual interest. That means you'll earn ₹719 every three months on ₹10,000.

A 3-year deposit offers a 7.1% annual interest rate. You'll earn ₹729 every three months on ₹10,000.

A 5-year deposit offers 7.5% annual interest. You'll earn ₹771 every three months on ₹10,000.

For senior citizens, there's the Senior Citizen Savings Scheme, which offers 8.2% interest. You'll earn ₹205 every three months on ₹10,000, and it's paid quarterly.

If you want some income every month, the Monthly Income Account is a good option. It offers 7.4% annual interest. You will earn ₹62 per month on ₹10,000, and this will be paid monthly.

National Savings Certificates (VIII Issue) offer 7.7% annual interest. This interest rate increases annually on an investment of ₹10,000.

The Public Provident Fund (PPF) scheme offers 7.10% annual interest.

Kisan Vikas Patra offers a 7.5% interest rate and matures in 115 months.

Mahila Samman Savings Certificates offer 7.5% interest. An investment of ₹10,000 will yield ₹11,602 upon maturity, and this interest rate is quarterly.

The Sukanya Samriddhi Account Scheme offers 8.20% annual interest.

Income Tax Exemption
There are several Post Office schemes in which you can invest and avail income tax exemption under the old regime. These include PPF, Sukanya Samriddhi, and others. You can claim a deduction of up to Rs 1.50 lakh by investing in these under Section 80C of Income Tax.

Interest on FDs from Private Banks
Many public and private banks are offering less than 7% interest on FDs. The number of banks offering interest rates above 7% is very low. Talking about private banks, HDFC, the country's largest private bank, is offering 6.6% interest on FDs ranging from 18 months to less than 21 months. ICICI Bank is offering 6.6% interest on FDs ranging from 2 years 1 day to 10 years.

Axis Bank is offering 6.6% interest on FDs ranging from 15 months to 10 years. Bandhan Bank is offering 7.2% interest on FDs ranging from 2 years to less than 3 years. RBL Bank is offering 7.2% interest on FDs ranging from 18 months to 3 years. Yes Bank is offering 7% interest on FDs ranging from 18 months 1 day to less than 5 years.

This is how much interest public banks are offering on FDs
Even public banks are not offering very high interest rates on FDs. Both Bank of Baroda and Bank of India are offering 6.6% interest on FDs of 444 days and 777 days. Bank of Maharashtra is offering 6.65% interest on 500-day FDs. Canara Bank is offering 6.5% interest on 444-day FDs. The Central Bank of India is offering 6.75% interest on long-term FDs such as 2222 days and 3333 days.

State Bank of India (SBI), the country's largest public sector bank, is offering 6.6% interest on FDs of up to 444 days under its 'Amrit Varshi' scheme. Union Bank of India is offering 6.6% interest on 3-year FDs. Indian Bank and Punjab & Sind Bank are also offering 6.6% interest on FDs with a maturity period of 444 days. Punjab National Bank is offering 6.6% interest on FDs with a maturity period of 390 days.

Disclaimer: This content has been sourced and edited from Navbharat Times. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.