Post Office FD vs Bank FD
Post Office FD (National Savings Time Deposit) carries a sovereign government guarantee, while a Bank FD is insured only up to the DICGC limit per bank. Banks offer wider tenure choices, from 7 days to 10 years, whereas a Post Office FD is limited to 1, 2, 3 or 5-year terms with a Section 80C benefit.
The FD scheme offered by India Post is known as National Savings Time Deposit Account. Some of the main features and differences of the FD account offered by banks when compared to Post Office are mentioned below:
National Savings Time Deposit Account
Eligibility
The eligibility criteria that must be met in order to open a National Savings Time Deposit Account are mentioned below:
- Minors who are older than 10 years can open an account in their name.
- A guardian can open an account on behalf of an individual who is of unsound mind.
- A guardian can open an account on behalf of a minor.
- Joint accounts can be opened.
- A single account can be opened.
Features
The main features of the National Savings Time Deposit Account are mentioned below:
- The minimum amount that must be deposited to open an account is Rs.1,000. Post the initial deposit, multiples of Rs.100 can be made.
- There is no upper limit to the amount that can be deposited.
- The interest that is generated will be paid on an annual basis.
- The interest will be deposited to the savings account that the account holder has entered when the application form is submitted.
- The different account types that can be opened are 1 year, 2 years, 3 years, and 5 years.
- Under the 5 years scheme, tax benefits are provided under Section 80C of the Income Tax Act, 1961.
- The deposit amount will be paid after the account expires.
- You can extend the account at the time of maturity. However, the account can be extended for a similar duration as the initial one.
- You can submit the application to extend the deposit when the account is being opened.
- You must visit the Post Office and submit the application form and passbook to extend the account.
- The interest rate that is applicable will depend on the date the account has been extended.
- You cannot withdraw the amount before 6 months from the date the account has been opened.
- The PO Saving Account interest rate is applicable in case the amount is withdrawn after 6 months but before 1 year.
- You must submit the application form and the passbook at the Post Office in the case of premature withdrawal.
- You can transfer or pledge the TD account as security. The acceptance letter and the passbook must be submitted in order to pledge or transfer the account.
Interest Rates
Tenure | Interest Rate (p.a.) |
1 Year | 6.90% |
2 Years | 7.00% |
3 Years | 7.00% |
5 Years | 7.50% |
Bank FD
Almost all banks in India offer FDs at attractive interest rates. Depending on the bank, the interest rates and tenure will vary. However, most banks offer FDs with a tenure ranging between 7 days and 10 years. Senior citizens may be offered an additional interest rate as well.
Bank FDs are insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC), a wholly owned subsidiary of the RBI, up to Rs.5 lakh per depositor per bank, covering both principal and interest. A Post Office FD, in contrast, carries a sovereign guarantee from the Government of India with no such cap, making it a safer option for very large deposits.
Eligibility Criteria
The eligibility criteria that must be met to open an FD account at most banks are mentioned below:
- Educational institutes
- Charitable institutes
- Agencies, clubs, and societies
- Hindu Undivided Family (HUF) members
- Partnership firms
- Minors
- Non-Resident Indians
- Resident individuals
Documents Required
The list of documents that must be submitted in order to open an FD account at banks are mentioned below:
- Passport-size photographs
- Bank details
- In the case of minors and senior citizens, proof of age must be submitted.
- Proof of address
- Proof of identity
Features
Some of the main features of an FD account offered by most banks are mentioned below:
- The tenure of the scheme can range between 7 days and 10 years.
- Nominations can be added to the account.
- Loans can be availed against the balance that is available in the account.
- The account can be transferred among branches.
- Attractive interest rates are offered.
- Senior citizens may be provided an additional rate of interest.
- Many banks provide you with an option to open an FD account online.
- TDS is applicable
- TDS on Bank FD interest is deducted under Section 393 of the Income-tax Act, 2025 (earlier Section 194A) once interest earned in a financial year crosses Rs.50,000 for regular depositors and Rs.1,00,000 for senior citizens (as of September 2026).
- Premature withdrawal of a Bank FD is usually allowed, but banks apply a penalty by reducing the applicable interest rate, typically by 0.50% to 1%, depending on the tenure held.
Interest Rates
The interest rates offered by some of the banks are mentioned in the tables below:
Kotak Mahindra Bank
The rates of interest offered by Kotak Mahindra Bank on term deposits below Rs.3 crore are as follows:
Tenure | Interest Rates for General Public (p.a.) | Interest Rates for Senior Citizens (p.a.) |
7 - 14 Days | 2.75% | 3.25% |
15 - 30 Days | 2.75% | 3.25% |
31 - 45 Days | 3.00% | 3.50% |
46 - 90 Days | 3.50% | 4.00% |
91 - 120 Days | 4.00% | 4.50% |
121 - 179 days | 4.25% | 4.75% |
180 Days | 5.00% | 5.50% |
181 Days to 269 Days | 5.50% | 6.00% |
270 Days | 5.50% | 6.00% |
271 Days to 363 Days | 6.00% | 6.50% |
364 Days | 6.00% | 6.50% |
365 Days to 389 Days | 6.35% | 6.85% |
390 Days (12 months 25 days) | 6.35% | 6.85% |
391 Days - Less than 23 Months | 6.35% | 6.85% |
23 Months | 6.55% | 7.05% |
23 months 1 Day- less than 2 years | 6.55% | 7.05% |
2 years- less than 3 years | 6.80% | 7.30% |
3 years and above but less than 4 years | 6.40% | 6.90% |
4 years and above but less than 5 years | 6.40% | 6.90% |
5 years and above upto and inclusive of 10 years | 6.25% | 6.75% |
Note: The interest rates mentioned in the table are as of 10 June 2026.
HDFC Bank
Below are the Domestic/NRO/NRE Term Deposits interest rates below Rs.3 crore
Tenure | Interest Rates for General Public (p.a.) | Interest Rates for Senior Citizen (p.a.) |
7 - 14 days | 2.75% | 3.25% |
15 - 29 days | 2.75% | 3.25% |
30 - 45 days | 3.25% | 3.75% |
46 - 60 days | 4.25% | 4.75% |
61 - 89 days | 4.25% | 4.75% |
90 days < = 6 months | 4.25% | 4.75% |
6 months 1 days <= 9 months | 5.50% | 6.00% |
9 months 1 day to < 1 year | 5.75% | 6.25% |
1 year to < 15 months | 6.25% | 6.75% |
15 months to < 18 months | 6.35% | 6.85% |
18 months to < 21 months | 6.45% | 6.95% |
21 months - 2 years | 6.45% | 6.95% |
2 Years 1 day to < 2 Year 11 Months | 6.45% | 6.95% |
2 Years 11 Months - 35 Months | 6.45% | 6.95% |
2 Years 11 Months 1 day <= 3 Year | 6.45% | 6.95% |
3 Years 1 day to < 4 Years 7 Months | 6.50% | 7.10% |
4 Year 7 Months - 55 months | 6.40% | 6.90% |
4 Year 7 Months 1 day <=5 Years | 6.40% | 6.90% |
5 Years 1 day to 10 Years | 6.15% | 6.65% |
Note: The interest rates are effective from 19 August 2026 and can change from time to time.
State Bank of India
Tenors | Interest Rates for Public (p.a.) | Interest Rates for Senior Citizens (p.a.) |
7 days to 45 days | 3.05% | 3.55% |
46 days to 179 days | 4.90% | 5.40% |
180 days to 210 days | 5.65% | 6.15% |
211 days to less than 1 year | 5.90% | 6.40% |
1 year to less than 2 years | 6.25% | 6.75% |
444 Days (Amrit Vrishti) | 6.45% | Contact the bank |
2 years to less than 3 years | 6.40% | 6.90% |
3 years to less than 5 years | 6.30% | 6.80% |
5 years and up to 10 years | 6.05% | 7.05%* |
The above-mentioned interest rates are effective from 15 December 2025. SBI can change the interest rates without prior notice. *The senior citizen rate for the 5-10 year tenure includes an additional 0.50% under the SBI We Care deposit scheme for senior citizens.
Summary
Post Office FD and Bank FD both offer fixed, predictable returns, but a Post Office FD carries a sovereign guarantee while a Bank FD is protected only up to the DICGC insurance limit per bank. Choose a Post Office FD for maximum safety and a fixed set of tenures, or a Bank FD for wider tenure choices, online convenience, and loan facilities. Compare the current Post Office FD and Bank FD interest rates above before you invest.
FAQs on Post Office FD vs Bank FD
1.What is a Post Office FD?
A Post Office FD, officially called the National Savings Time Deposit Account, is a fixed-income scheme offered by India Post where a lump sum earns a fixed rate of interest for a chosen tenure. It is backed by the Government of India, unlike a Bank FD, which is offered by individual banks and NBFCs. Both a Post Office FD and a Bank FD pay interest either periodically or at maturity, depending on the scheme.
2.Who can open a Post Office FD?
A resident individual can open a Post Office FD, either singly or jointly with another adult. A guardian can also open a Post Office FD on behalf of a minor or a person of unsound mind, and a minor above ten years old can open one in their own name.
3.What is the minimum amount needed to open a Post Office FD?
The minimum amount required to open a Post Office FD, and the fixed multiples in which further deposits can be made, are listed in the features section above. There is no upper limit on how much can be invested in a Post Office FD.
4.How often is interest paid on a Post Office FD?
Interest on a Post Office FD is calculated and paid out annually to the savings account the depositor names while opening the account. This differs from many Bank FD options, which let you choose monthly, quarterly, or cumulative interest payouts.
5.What tenures are available for a Post Office FD?
A Post Office FD can be opened for 1 year, 2 years, 3 years, or 5 years, unlike a Bank FD, which typically offers tenures ranging from 7 days to 10 years. The 5-year Post Office FD also comes with an added tax benefit, described below.
6.Can a Post Office FD be withdrawn before maturity?
A Post Office FD cannot be withdrawn within the first 6 months of opening the account. Between 6 months and 1 year, a Post Office FD can be withdrawn prematurely at the Post Office Savings Account rate, provided the application form and passbook are submitted at the Post Office.
7.Does a Post Office FD offer any tax benefit?
Yes, a Post Office FD opened under the 5-year scheme qualifies for a tax deduction under Section 80C of the Income Tax Act, 1961. This tax benefit is not available on a Post Office FD of a shorter tenure.
8.What is a Bank FD?
A Bank FD is a fixed deposit account offered by banks in India where a lump sum is invested for a fixed tenure at a predetermined interest rate. Unlike a Post Office FD, a Bank FD is available across a wide range of tenures and is offered by multiple banks, each with its own rates and features.
9. Who is eligible to open a Bank FD?
Resident individuals, minors, Non-Resident Indians, Hindu Undivided Families, partnership firms, and institutions such as educational and charitable bodies are typically eligible to open a Bank FD. This is a wider eligibility base than a Post Office FD, which is largely restricted to resident individuals.
10.What documents are required to open a Bank FD?
Opening a Bank FD generally requires proof of identity, proof of address, passport-size photographs, and bank details, with proof of age additionally needed for minors and senior citizens. These document requirements are listed in full in the Bank FD section above.
11.What tenures are available for a Bank FD?
A Bank FD can usually be opened for any tenure between 7 days and 10 years, offering far more flexibility than a Post Office FD's fixed 1, 2, 3, or 5-year options. The exact tenure buckets for a Bank FD vary by bank, as shown in the tables above.
12.Do senior citizens earn a higher interest rate on a Bank FD?
Yes, most banks offer senior citizens an additional interest rate on a Bank FD over the rate offered to the general public. The exact additional rate varies by bank and tenure, as shown in the Bank FD interest rate tables above.
13.Can I take a loan against a Bank FD?
Yes, most banks allow a loan or overdraft against the balance held in a Bank FD, an option not typically available on a Post Office FD. This makes a Bank FD useful for short-term liquidity needs without breaking the deposit.
14.Can a Bank FD be withdrawn before maturity?
Most banks allow premature withdrawal of a Bank FD, though a penalty interest rate typically applies, as explained in the Bank FD section above. This is broadly similar to a Post Office FD, which also permits withdrawal after an initial lock-in period, subject to conditions.
15. Is a Post Office FD safer than a Bank FD?
A Post Office FD carries a sovereign guarantee from the Government of India, so the entire deposit is protected regardless of amount. A Bank FD, by contrast, is insured only up to the DICGC limit per depositor per bank, as explained in the Bank FD section above.
16.Which is better, a Post Office FD or a Bank FD?
Whether a Post Office FD or a Bank FD suits you better depends on your priorities: a Post Office FD offers sovereign-backed safety and a fixed set of tenures, while a Bank FD offers more tenure choices, online account opening, and loan facilities. Comparing the current Post Office FD and Bank FD interest rates above can help you decide.
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