Right now both State Bank of India (SBI) and post offices offer good interest rates on investing money in their FDs. In such a situation, people have a lot of confusion between the two. Today we will tell you about the interest rates of these two, after which you will be able to easily decide which one you can invest in and earn more profits.SBI 5-year FD or MIS, which is better for you let’s find out.
Investors can manage their expenses and achieve their financial objectives through various investment options. The State Bank of India (SBI) 5-year fixed deposit scheme (FD) and the Post Office Monthly Income Scheme (MIS) are two viable options that allow individuals to invest a lump sum and receive monthly interest payments.
SBI
The State Bank of India (SBI) provides a 5-year fixed deposit option tailored for long-term investors. This investment not only offers a secure return but also provides tax advantages of up to Rs 1.50 lakh per financial year under Section 80C of the Income Tax Act, 1961, for those who choose to withdraw their funds upon maturity. Typically, upon maturity, investors receive both the principal amount and the accrued interest.
Does SBI allow monthly withdrawals from fixed deposits?
According to the official SBI website, interest on term deposits (FDs) is generally paid quarterly from the date of issuance or at maturity along with the principal. However, upon request, depositors can opt to receive interest payments monthly, semi-annually, or annually for term deposits with a duration of 12 months or more.
As stated on the SBI website, the interest rate for the 5-year FD for general customers is 6.50 percent, while senior citizens benefit from a higher interest rate of 7.50 percent for the same fixed deposit.
What is Post Office MIS?
Post Office MIS offers a monthly withdrawal option based on a one-time investment. Individuals can establish either an individual or a joint account with a minimum initial deposit of Rs 1,000. The scheme provides a fixed interest rate of 7.4 percent for all account holders, including senior citizens.
An individual account holder can invest up to Rs 9 lakh, while a joint account can accommodate a maximum of Rs 15 lakh. Interest is accrued until the account matures after a period of 5 years. Upon maturity, account holders can close their accounts and retrieve their principal investment. According to the online calculator, the projected monthly interest for general citizens is approximately Rs 2,708.33, leading to a total estimated interest of Rs 1,62,500 over 5 years. For senior citizens, the anticipated monthly payout is around Rs 3,125, with a total interest estimate of Rs 1,87,500 over the same period.
For an investment of Rs 10 lakh, general citizens can expect an estimated interest of Rs 3,25,000 over 5 years, resulting in a monthly payout of Rs 5,416.66. In contrast, if a senior citizen invests Rs 10 lakh, their estimated monthly payout would be Rs 6,250, with a total interest of Rs 3,75,000 over 5 years.
MIS
If you put Rs 10 lakh in a joint account, you can expect to withdraw around Rs 6,167 each month. For a Rs 15 lakh investment in the same type of account, the monthly payout jumps to about Rs 9,250.
