After the reduction in repo rate, banks are reducing interest on FD. Due to this, investors will get less returns. To avoid this, you can invest in the TD savings scheme of the post office.
Reserve Bank of India (RBI) has cut the repo rate for the second consecutive time. After this, many banks including Punjab National Bank, Yes Bank, Canara Bank, Kotak Mahindra Bank, Equitas and Shivalik Small Finance Bank have reduced the interest on FD. That is, now investors making FD will get less return. If you are also thinking of getting FD and are worried about getting low interest rate, then you can opt for Post Office Time Deposit (TD) Saving Scheme. You will get more return by investing in Post Office TD. Let us know how TD has become better than FD after the cut in interest rates.
Where how much interest is being given
At present, interest of 7.5% is being given on 5-year TD in the post office. At the same time, banks are giving interest at the rate of 6.5% to 7.1% on FD of this period. Not only this, insurance is available only up to Rs 5 lakh in bank FD. That is, if the bank sinks, your investment up to Rs 5 lakh will be safe. On the other hand, Post Office TD is fully secured by the government. Along with this, TDS is not deducted on it, due to which you get full payment of interest.
Best for what type of investors
If your priority is safe investment + fixed return, then Post Office TD is better than Bank FD at this time. On the other hand, if you want a little flexibility and convenience, then you can choose Bank FD. However, here you will get less return. So if you want high returns with safe investment, then choose Post Office TD. You can easily invest in Post Office TD. Keep one thing in mind that TD is still largely a manual process, but now it is improving through India Post Payments Bank.
