Interest rate up to 7.5%: 5-year post office time deposit (POTD) is offering higher rates than these top 10 banks

Post office time deposits (POTD) and bank fixed deposits are similar investment products. The funds in a post office term deposit are fully insured by the government and have guaranteed returns. For the July-September quarter of 2024, the interest rate on post office time deposits (POTD), is 7.5% for a five-year term. Note that under the POTD scheme, senior citizens are not offered any higher rates than regular citizens, unlike many banks. Interest is paid annually but calculated quarterly. These deposits can be closed prematurely by submitting the prescribed application form with a passbook at the concerned Post Office.

Savings account interest rate up to 7.25%: Post office savings account vs SBI, HDFC Bank, ICICI Bank, PNB, Union Bank, IDFC FIRST Bank

POTD withdrawal

If a deposit in a five-year account is withdrawn prematurely after four years, interest at the Post Office Savings Account rate of 4% will be paid now.


Previously, if a five-year time deposit account is closed after four years from the date of deposit, interest will be calculated using the rate applicable to three-year time deposit accounts.

Bank fixed deposits

The funds in bank fixed deposits are guaranteed up to Rs 5 lakh by the Deposit Insurance and Credit Guarantee Corporation (DGIC). The minimum investment vary with banks. Interest rate also differ depending on the bank

Banks such as HDFC Bank, ICICI Bank, Axis Bank, and IDFC First Bank offer an interest rate of 7 per cent on deposits maturing in five years. IndusInd Bank offers an interest rate of 7.25 per cent on FDs maturing in five years. SBI offers an interest rate of 6.5 per cent for fixed deposits maturing in five years.

Canara Bank offers 6.70% on five year fixed deposit for general citizens. As you can see, you get a relatively higher interest if you invest in five-year post office term deposits than in five-year FDs in most public and private banks.

POTD vs top 10 banks

	General Citizen	Senior citizen
POTD	7.50%	7.50%
SBI	7%	7.50%
HDFC Bank	7%	7.50%
ICICI Bank	7%	7.50%
Canara Bank	6.70%	7.20%
IDFC First	7%	7.50%
PNB	6.50%	7.30%
BOB	6.50%	7.15%
Bank of India	6.50%	7%
Indian Bank	6.25%	6.75%
IDBI	6.50%	7%