Bank FDs vs post office term deposit: Which offers senior citizens higher interest rate for short term

The government has raised the interest rates for a few small savings schemes after almost four years. Three minor saving programmers' interest rates were increased for the quarter of October-December 2022, per a circular released by the Finance Ministry on September 29.

The government has revised interest rate on select term deposits, the govt has hiked interest rate by 1 % on 2-year term deposits and 3- year term deposits. Big banks have also increased fixed deposit rates in last few months. Almost all banks offer higher interest rates for senior citizens (compared to those for the general public), while post office term deposit offers same rates for all citizens. Here is a quick comparison of interest rate offered by post office term deposits and banks FD for 1-3 year tenors.

National Savings Time Deposit Account (TD)

The government has raised interest rates on select term deposits on 2-year term deposits to 5.7% from earlier 5.5% and on 3-year term deposits will now offer 5.8% from earlier 5.5%. While, 1 year term deposits, will continue to offer 5.5% and 5-year deposit will earn 5.8%.

SBI FD interest rates
SBI FD interest rates with tenure ranging from 1 year to less than 2 years will fetch interest rate of 5.95% and 2 years to less than 3 years will earn 6% for senior citizens. While tenure of 3 years to less than 5 years will earn interest rate of 6.10%.

HDFC Bank FD interest rates
For senior citizens, the bank offers interest rate of 6% on tenure between 1 year 1 day - 3 years and 6.60% for tenure ranging between 3 year 1 day- 5 years.

ICICI Bank FD interest rates
For Senior citizens, ICICI Bank offers interest rate of 6.20% on tenure of 1 year to 2 years. For tenure of 2 years 1 day to 3 years, the bank offers 6.30% and 6.60% for 3 years 1 day to 5 years.

Interest rate comparison

	1-year	2 years	3 year-5 years
SBI	5.95%	6%	6.10%
HDFC Bank	6.00%	6%	6.60%
ICICI Bank	6.20%	6.30%	6.60%
Post Office Term Deposit	5.50%	5.70%	3-year is 5.8%,
			5- year is 6.7%

Source: Websites