TV9
user profile
Sign In

By signing in or creating an account, you agree with Associated Broadcasting Company's Terms & Conditions and Privacy Policy.

Subscribe Whatsapp Channel
Bihar 2025 India Sports Tech World Business Career Religion Entertainment LifeStyle Photos Shorts Education Science Cities Videos

After the RBI rate cut: Post office deposits gaining over bank FDs

Post office time deposits -- the approximate equivalent of fixed deposits in banks -- is suddenly gaining more attention that bank FDs. The reason is simple: the aggressive rate cut by the Reserve Bank between February and June, which has pushed the FD rates of banks down.

Post office time deposits now offer significantly higher returns compared to the FD rates in top banks including SBI, PNB, BoB, HDFC, ICICI, Axis and more apart from higher level of security of the capital invested. (Picture Credit: depositphotos)
Post office time deposits now offer significantly higher returns compared to the FD rates in top banks including SBI, PNB, BoB, HDFC, ICICI, Axis and more apart from higher level of security of the capital invested. (Picture Credit: depositphotos)
| Updated on: Jul 08, 2025 | 08:30 AM

Kolkata: No matter how much the popularity of the equity markets and market-linked instruments such as mutual funds, the attraction of fixed income instruments will never go down in a country lie India. In the fixed-income space, the bank fixed deposits have suddenly paled as the banks have slashed their interest rates after the aggressive Repo Rate cut by RBI between February and June this year. The central bank slashed the key policy rate by 100 basis points forcing the prompting the banks to bring down both the lending and deposit rates significantly.

Significantly, the Centre did not revise the interest rates payable on small savings instruments which came up for revision on July 1 and left all interest rates on instruments such as all post office schemes untouched. In the process, post office time deposits have suddenly become more attractive to the common people than the FDs in top banks. Let's have a closer look at the rates paid by both category of instruments.

Also Read
Post office time deposit: Post office term deposits, which are equivalent to fixed deposits in banks, come with four tenures and significant interest rates and the highest guarantee on safety of capital.
Post Office Time Deposits: How much will you earn on Rs 1 lakh FD investment
Analysts point out that if the investment horizon of an individual is short, say six months or less, it is unlikely whether he/she will find bond funds useful. (Picture Credit: depositphotos)
With FD rates declining are bond funds becoming more attractive?
Best HDFC Bank FD Interest Rates: Compare 1-Year & 3-Year Returns
HDFC Bank FD Rates 2025: How much will you earn on Rs 5 lakh investment

Post office term deposits rates

The post office term deposits are offering the following interest rates:

One-year tenure: 6.90%

Two-year tenure: 7.00%

Three-year tenure: 7.10%

Five-year tenure: 7.50%

In comparison top banks are offering the following rates on FDs:

One-year tenure

SBI: 6.25%

PNB: 6.40%

BoB: 6.50%

HDFC Bank: 6.25%

ICICI Bank: 6.25%

Axis Bank: 6.25%

Two-year tenure

SBI: 6.45%

PNB: 6.40%

BoB: 6.50%

HDFC Bank: 6.45%

ICICI Bank: 6.50%

Axis Bank: 6.50%

Three-year tenure

SBI: 6.30%

PNB: 6.40%

BoB: 6.50%

HDFC Bank: 6.45%

ICICI Bank: 6.60%

Axis Bank: 6.50%

Five-year tenure

SBI: 6.05%

PNB: 6.50%

BoB: 6.40%

HDFC Bank: 6.40%

ICICI Bank: 6.60%

Axis Bank: 6.50%

Flexibility in bank FDs

Therefore, bank FDs have fallen back in the race of offering interest rates to attract deposits. Bank FDs run the risk of interest rates falling again if the RBI slashes rates again. The main reason of the central bank cutting rates was to trigger consumption in the country, which was lukewarm. If the desired consumption level is not reached, there could be rate cuts again. However, banks FDs offer greater flexibility to the customer as far as defining maturity period are concerned. You can have maturity rates from 7 days to 10 years which is not possible in a posit office.

But post office schemes score on another point -- the security aspect. All small savings instruments enjoy sovereign guarantee while the banks enjoy a cover of only Rs 5 lakh. Therefore, to deposit higher amounts, post office time deposits are far more secure than bank FDs.

{{ articles_filter_432_widget.title }}