SBI vs HDFC Bank vs ICICI vs POTD: Which offers highest FD interest rates

Fixed deposit (FD) investors are a happy lot. That is because after suffering with decadal low interest rates during the two pandemic years, banks and NBFCs have finally started to raise interest rates on FDs. FD rates are being increased after the Reserve Bank of India (RBI) hiked repo rates by 90 bps since May 2022

Many big banks including SBI, ICICI Bank and HDFC Bank have increased their fixed deposit rates for amounts below Rs.2 crore

During the time that banks slashed FD rates, the government kept interest rates on small savings schemes like the post office term deposit unchanged. Even now, for the July-September quarter, the interest rates on small savings schemes have not been changed.


Now that banks have started to hike FD interest rates, have they caught up with post office term deposit rates?

Bank FDs vs post office TD

One-two year FDs: SBI offers an interest rate of 5.3 percent for this tenure. HDFC Bank and ICICI Bank offer 5.35 percent interest. One- and two-year POTD come with an interest rate of 5.5 percent for July-September quarter.

Two-three year FDs: ICICI Bank and HDFC Bank offer 5.50 percent for 2-3 year FDs, which is the same as the Post Office term deposit interest rates. SBI offers 5.35 percent for this tenure.

Three-five year FDs: For this year, POTD scores much higher than banks. For 5-year POTD the interest rate offered is 6.7 percent for the July-September quarter. HDFC Bank and ICICI Bank offer 5.7 percent for 3-5 year FDs, while SBI FDs of this tenure come with an interest rate of 5.45 percent.

Here's a look at the full range of interest rates offered by ICICI Bank, HDFC Bank, SBI and POTD (as on July 5, 2022).

ICICI Bank
ICICI Bank provides interest rates ranging from 2.75 percent to 5.75 percent for terms ranging from 7 days to 10 years.

HDFC Bank
HDFC Bank offers interest rates ranging from 2.75 percent to 5.75 percent for terms ranging from 7 days to 10 years.

State Bank of India
State Bank of India offers interest rates ranging from 2.90 percent to 5.50 percent for terms ranging from 7 days to 10 years.

Post Office term deposit
Post office term deposits offer interest rates ranging from 5.5 percent to 6.7 percent for tenure ranging from one year to 5 years.