SBI, PNB, HDFC, ICICI Senior Citizen FD rates vs Kisan Vikas Patra: Which schemes pay better interest rates?

Bank FD Scheme vs Kisan Vikas Patra: The Centre has often claimed that the current interest rates on various Small Savings Schemes, like Senior Citizen Savings Scheme, National Savings Certificates, and Kisan Vikas Patra, are comparatively better than the fixed deposit schemes offered by public and private banks.

But in the current volatile market situation, bank fixed schemes are touted to be safer as their returns are not linked to market-linked schemes.

Since the Reserve Bank of India raised its repo rate in the first week of February, several banks have revised their interest rates and are offering attractive inflation-beating fixed deposit rates. The banks are even offering long-term deposits of 5 to 10 years, where the interest rates are as high as 7.5 per cent.

Let’s compare the FD rates of top banks and Kisan Vikas Patra's interest rates.

Kisan Vikas Patra

Kisan Vikas Patra is one of the popular small savings schemes offered by the Post Office. The KVP interest rate is revised by the Union Government on a quarterly basis. From January-March 2023, the Centre is offering 7.2 per cent.

The government revised the bank FD rates in response to rising inflation and an increase in the repo rates by the Reserve Bank of India. With an interest rate of 7.2 per cent, any investment in a KVP account will double in 10 years. Kisan Vikas Patra has a lock-in period of 2 years and 6 months.

The minimum deposit for a KVP account is Rs 1,000, and there is no maximum investment limit.

Even children above the age of 10 years can open a KVP account.

Bank FD rates

All major banks, from the State Bank of India (SBI), HDFC Bank Limited, Punjab National Bank (PNB), ICICI Bank, Kotak Mahindra Bank to Axis Bank, have revised their interest rates. While nationalised banks offer a return of up to 7.5- 8 per cent on fixed deposits, small finance banks (SFBs) offer a return of up to 9.5 per cent on fixed deposits.

Although bank FD interest is taxable, senior citizens get an additional benefit that ensures that tax liability is minimal or nil.

State Bank of India

For a period of 10 years, the country’s largest bank by assets, SBI is offering 7.5 per cent interest to senior citizens. These rates are for deposits below Rs 2 crore. On a deposit of Rs 1 lakh, an investor can earn more than Rs 2.10 lakh in 10 years. Here’s the calculation.

In addition to this, SBI has introduced a new fixed deposit scheme for a period of 400 days, Amrit Kalash Deposit. The interest rate for senior citozens is 7.60 per cent. Depositors can invest in this special plan until March 31, 2023.

FD calculator

Investment: Rs 100,000

FD rate: 7.5%

Time period: 10 years

Estimated returns: Rs 110,235

Total value: Rs 210,235

Punjab National Bank

Punjab National Bank (PNB) is offering 7.3 per cent to its senior citizen customers for a schemes of 10 years. A deposit of Rs 1 lakh in PNB at 7.3 per cent rate of interest can earn an investor Rs 2.14 lakh by the end of 10 years.

FD calculator

Investment: Rs 100,000

FD rate: 7.3%

Time period: 10 years

Total value: Rs 206,147

HDFC Bank

HDFC Bank is offering a special scheme for senior citizens -- Senior Citizen Care FD, where the rate of interest is 7.75 per cent for a period of 10 years. The scheme is available till March 31, 2023. The offer will be applicable for deposits of below Rs 2 crore.

If Rs 1 lakh is invested at 7.75 per cent interest, senior citizens can straight away earn Rs 2.15 lakh after 10 years.

FD calculator

Investment: Rs 100,000

FD rate: 7.75%

Time period: 10 years

Total value: Rs 215,456

ICICI Bank Fixed Deposit

ICICI Bank Golden Years FD is a dedicated fixed deposit scheme for senior citizens, where the interest rate is 7.50 per cent for tenors of 10 years. The scheme is available till April 7, 2023, for deposits below Rs 2 crore.

On an investment of Rs 1 lakh at 7.5 per cent rate, senior citizens can earn Rs 2.1 lakh to senior citizens after 10 years.

FD calculator

Investment: Rs 100,000

FD rate: 7.5%

Time period: 10 years

Total value: Rs 210,235

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