Difference between Fixed Deposit (FD) vs Post Office Schemes?

This is one of the most FAQs of investors, especially the first-timers. Most investors are confused between postal office schemes and fixed deposits. They wonder which one would be better for them. However, it all boils down to the investor’s needs, conveniences and financial goals.

If you are looking for a reliable, stable option, then you should go for post office schemes. The interest rate of post office schemes are pretty much fixed, while the interest rates of a bank FD may go up or down, depending on the economy. Thus bank Fixed Deposits are riskier, but there is also a chance of a higher reward.

In the case of bank Fixed Deposits, the minimum deposit amount is usually higher than that of a post office account. You must be an Indian to open a post office scheme, but there are no such restrictions in case of a bank Fixed Deposits. In fact, many banks offer a higher rate of interest to NRI investors.

A post office account can be closed after six months but before one year. After that, you cannot close your account before its completion. On the other hand, most banks nowadays allow premature withdrawal or closure of account.

So here are the comparisons between post office schemes and fixed deposits. Do thorough research of your own, weigh in your options and then choose carefully.

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