Senior Citizen Fixed Deposit for more than Rs 5 lakh: Is Post Office Time Deposit safer than banks?
Post Office Time Deposit vs Bank Fixed Deposit: While several banks are offering more than 9 percent interest rate on fixed deposits to senior citizens, Post Office Time Deposit is still a safer option when it comes to guaranteed returns. Read on to know why.
As per the RBI’s Deposit Insurance and Credit Guarantee Corporation (DICGC) rules, investments up to Rs 5 lakh (including principal and interest) in a scheduled bank are guaranteed. However, when it comes to the post office, there is no such limit.
Moreover, Post Office Time Deposits or Fixed Deposits enjoy a sovereign guarantee as they are covered under the Government Savings Promotion Act, 1873.
If you want a full guarantee of your deposits in banks, it is advised to invest only that much amount for which the prrincipal+interest is not above Rs 5 lakh. However, in the case of the Post Office, there is a full guarantee on any amount invested in any of the four available time deposit tenors.
The rules for Post Office Fixed Deposits are defined under National Savings Time Deposit Scheme, 2019. The Post Office website says there is no limit on the maximum amount that can be invested in Time Deposits. The minimum amount required is Rs 1000 and thereafter in. multiples of Rs 100.
Also Read: Is Senior Citizen Fixed Deposit in banks better than Post Office? 5 factors to help you decide
For the July-September quarter of FY 2023-24, the Post Office Time Deposit interest rates are as follows
Deposits in 5-year Post Office Fixed Deposit also qualify for deduction under Section 80C of the Income Tax Act, subject to a limit of Rs 1.5 lakh per year.
Not necessary. Senior citizens should make their FD decisions on the basis of the interest rate offered by a bank and the amount
Read more on financialexpress.com
