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Weigh your investment decision by checking the significant differences between Fixed deposit and Post Office Saving Schemes based on four major parameters!
When it comes to investing your hard-earned money, you always need to do careful planning and undertake research before settling with an option. This is mainly because the investment decision you make can be affected by several aspects such as interest rate, the term of investment, the flexibility of operation, among many others. As an informed investor, it is essential to evaluate different options and device an investment strategy after considering several factors.
It is easy to get carried away by market trends and newspaper headlines when investing money, but it is wise to evaluate your investment purpose, the amount of fund you have, and your future financial needs. If you are struggling to decide which is the better investment option among fixed deposit and post office saving schemes, it is smart to weigh your options carefully and choose accordingly.
When you deposit money in a bank account or with an NBFC for a pre-determined period and at a pre-determined rate of interest, it is called FD or fixed deposit scheme. FD, as a financial instrument, has been one of the safest and the most promising investment schemes in India. It has delivered good returns consistently over a significant period. Fixed deposit is a worthy investment option for those who want to play safe when it comes to investing their money.
Post office saving schemes, as the name suggests, is not a single scheme. Instead, it includes a list of saving schemes that offer a risk-free and reliable return on investment. The post office schemes are available across all the post offices in the country. One of the most known schemes of the post office is PPF, which is operated in the post office of every Indian city as well as in all public and private sector banks.
Schemes available under post office saving scheme
Fixed deposit is a traditional investment instrument offered by banks. Any amount of money with no maximum limit can be invested in a fixed deposit for a term ranging from 7 days to 10 years. The interest rates offered on fixed deposit vary between banks and different categories of investors like senior citizens and regular investors.
The post office operates post office saving schemes, which are also termed as small saving schemes. They are known for better interest rates than fixed deposits. Here is a comparison of the different features of fixed deposit and post office saving schemes.
Both Fixed deposit and post office saving schemes come with a set of advantages and disadvantages. A decision to invest between fixed deposit and post office saving schemes depends on the surplus amount you would like to invest. The fixed deposit helps you to invest a lump sum amount for a specific term, whereas most of the post office savings schemes allow you to invest a nominal amount on a regular basis. You can plan your investment considering various aspects such as interest rates, tax efficiency, and service quality before making an investment decision. Happy investing!
Recommended Read: Are Fixed Deposits a Good Investment?