Which option is better? Time deposit or FD?

The government has increased the interest rates of some small savings schemes. After this change, the time deposit (TD) scheme of one to three years of the post office will now get higher interest. TD works like Fixed Deposit (FD) of banks. Banks have also increased their FD rates several times in the last few months. Now if you want to invest in the current situation, then there is a need to consider which option would be better in bank and post office schemes.
Rate of return
Return and risk are first seen for investment. If we compare the returns, now the post office FD is getting 6.9 percent interest annually in one year FD and 7 percent interest in two and three year FDs. In five-year FD, maximum interest is being given at the rate of 7.5 per cent per annum. If we now look at the returns of FDs of major banks, then the country’s largest public sector bank SBI is paying 6.80 percent interest on FDs of 1 to 2 years and 7 percent interest on deposits of 2 to 3 years, while FDs of 3 to 5 years, 6.50 percent interest is being offered. PNB is paying 6.50 to 7 percent interest on FDs of 1 to 5 years. Other government banks are also giving more or less similar interest on FD. In bank FD, if you do not choose to take interest before maturity, then this interest will continue to be added to your original investment, on which you will get the benefit of compound interest. In the post office, the interest is calculated on a quarterly basis but on an annual basis, the interest is transferred to the investor’s account. If the investor does not claim this interest, then he does not get the facility of interest on interest.

Bank and post office FD 
If we talk about the merits, there is no additional interest for senior citizens in the time deposit scheme of the post office, whereas in bank FDs, up to half a percent more interest is given than normal depositors. In Time Deposit, the depositor gets interest on an annual basis, whereas in FD, interest is given monthly, quarterly and annually. The lock-in period of post office FD ranges from one to 5 years. Bank FD has the facility of investment from 7 days to 10 years. You can withdraw money only after six months of investment in time deposit, but there is an option to withdraw money at any time in FD. However, some fine may have to be paid in lieu of this.
investment protection

Post office is a government institution. In this scheme, there is a complete guarantee of the government on investment and returns. According to this, the TD account of the post office is more secure than the FD of the banks because only the investment of up to five lakh rupees is covered on the FD of the banks. For this, insurance cover is available through Deposit Insurance and Credit Guarantee Corporation (DICGC), a subsidiary of RBI.

Which is better
If you look at the security of investment, then the post office scheme is more secure. If we talk about returns, then on this front also the post office FD is proving to be better. In such a situation, if you are thinking of investing in FD, then first compare the interest rates. After this, keep in mind whether the bank or post office is near your house. After considering all these issues, take the investment decision.