Post Office Time Deposit: the forgotten safe alternative to bank FDs
While bank FDs get most of the attention, the Post Office Time Deposit (POTD) often offers higher rates, a full government guarantee (no ₹5L cap), and the same tax benefits. Yet most investors overlook it simply because it's less marketed.
Current POTD rates vs. major bank FD rates (2025)
| Tenure | Post Office | SBI | HDFC Bank | ICICI Bank |
|---|---|---|---|---|
| 1 year | 6.9% | 6.8% | 7.1% | 7.25% |
| 2 years | 7.0% | 7.0% | 7.4% | 7.25% |
| 3 years | 7.1% | 6.75% | 7.4% | 7.0% |
| 5 years | 7.5% | 6.5% | 7.35% | 7.0% |
Senior citizens get an additional 0.5% from banks but not from Post Office (though SCSS at 8.2% is available separately for seniors).
Why Post Office FD over bank FD?
- Full government guarantee — no ₹5L DICGC cap
- Higher 5-year rate — 7.5% vs. 6.5–7.35% at most banks for 5-year FD
- 80C benefit on 5-year TD — same as tax-saving bank FD
- Available pan-India — 1.5 lakh+ post offices vs. limited bank branch reach
For 1–3 year tenures, private banks like HDFC/ICICI edge ahead — but for 5-year tenure, Post Office remains competitive.