3 post office systems give higher returns than bank FDs with 80C deductions
Bond investors are scrambling to find banks offering better interest rates as bank fixed deposit rates rise, but small savings schemes or postal savings schemes are government-backed investments that now offer higher returns than bank fixed deposits. Small savings schemes are preferable to fixed bank deposits in rising interest rate environments because they have quarterly interest rate resets as opposed to fixed interest rate fixed bank deposits. Since the RBI raised the repo rate in August, all major banks have raised their interest rates on fixed deposits in a bid to attract investors. Major banks such as SBI offer interest rate up to 5.65%, HDFC Bank offers interest rate up to 6.10%, ICICI Bank offers interest rate up to 6.10 %, Axis Bank offers an interest rate of up to 6.05%, and PNB offers a maximum interest rate of 6.10%. However, all of these interest rates, even with recent increases from the aforementioned institutions, are still well below those of very popular small savings schemes, such as the Senior Citizen Savings Scheme (SCSS), the Public Provident Fund Account (PPF ) and the Sukanya. Samriddhi Accounts.