In a FD account, deposit is locked in for a predefined period for guaranteed returns.

Fixed deposit (FD), an investment avenue offered by commercial banks, non-banking financial companies, small saving banks and post offices, grants higher rate of interest as compared to savings accounts. In an FD account, deposit is locked in for a predefined period for guaranteed returns. The interest rates on fixed deposits (FDs), which are revised from time to time, vary according to the tenor of a fixed deposit across various maturities. India Post - which operates a network of more than 1.5 lakh post offices across the country - offers four maturity periods under its FD account. State Bank of India, the country's largest lender, offer a maturity period ranging from seven days to 10 years for fixed deposits.

Given below is a comparison of fixed deposit (FD) interest rates offered by State Bank of India (SBI) and India Post:

State Bank of India (SBI)

The minimum amount that one requires to open a fixed deposit with SBI is Rs 1,000, according to SBI's official website- sbi.co.in. SBI's FD account offers payment of interest at monthly/quarterly basis which can be availed as per the investor's requirement. In case of monthly interest payment, the interest is paid at a discounted rate, according to SBI. SBI currently provides interest rates to the tune of 5.75-6.75 per cent to the general public on fixed deposit (FD) up to Rs. 2 crore. Senior citizens get 0.25 per cent extra interest rate for FDs above Rs 10,000, according to SBI.

The following FD interest rates are applicable on deposits below Rs. 2 crore with effect from May 9, 2019, according to bank's website:

Period General public (% p.a.) Senior citizens (% p.a.) 7 days to 45 days 5.75 6.25 46 days to 179 days 6.25 6.75 180 days to 210 days 6.35 6.85 211 days to less than 1 year 6.4 6.9 1 year to less than 2 year 7 7.5 2 years to less than 3 years 6.75 7.25 3 years to less than 5 years 6.7 7.2 5 years and up to 10 years 6.6 7.1

(As mentioned on India Post's website)

India Post

The minimum amount required to open a fixed deposit with the post office is Rs 200, according to India Post's website - indiapost.gov.in. Post office FD account offers interest rates across four maturities: one year, two years, three years, and five years. In this case, the interest is payable annually but is calculated quarterly. Given below are the FD interest rates offered by post office:

Period Rate 1 year time deposit (fixed deposit) account 7.00% 2 year time deposit (fixed deposit) account 7.00% 3 year time deposit (fixed deposit) account 7.00% 5 year time deposit (fixed deposit) account 7.80%

(As mentioned on India Post's website)

Investments made under the 5-year fixed deposit account qualifies for income tax benefits under Section 80C of the Income Tax Act, 1961, according to India Post.