SBI vs Central Bank of India : Interest Upto 1.5 Lakhs – Which FD Offers Better Returns?

SBI vs Central Bank of India : When it comes to securing your savings and earning reliable returns, fixed deposits (FDs) are among the most popular investment options. They offer safety, stability, and predictable interest income. However, selecting the best FD depends on comparing interest rates, benefits, and investment tenure. For those seeking higher returns within a short period, special FD schemes introduced by banks like the State Bank of India (SBI) and the Central Bank of India present attractive opportunities. Among these, the “Amrit Vrishti FD Scheme” by SBI and the “Cent Super Time Deposit” by the Central Bank of India stand out.

This essay delves into the details of these two special fixed deposit schemes, comparing their interest rates, tenure, and returns. By the end, you’ll have a comprehensive understanding of which scheme may be the better choice for you.

Fixed Deposit Overview

Fixed deposits are financial instruments offered by banks and financial institutions where investors deposit a lump sum for a predetermined period at a fixed interest rate. At maturity, the investor receives the principal amount along with the accrued interest. FDs are preferred due to their safety, especially when offered by reputable banks. They also cater to different needs, with tenures ranging from short-term to long-term.

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While normal FDs have tenures of 2 years, 3 years, 5 years, or even 10 years, special FD schemes are crafted for limited periods and provide slightly higher interest rates. These schemes are tailored to offer attractive returns within a shorter investment horizon, such as 1 to 2 years. Let’s examine the features of the two special FDs under discussion.

SBI’s Amrit Vrishti FD Scheme

Key Features:
The Amrit Vrishti FD Scheme is a special fixed deposit launched by the State Bank of India in July 2024. It has an investment tenure of 444 days and caters to both Indian citizens and NRIs. Some of its standout features include:

1. Tenure: 444 days.
2. Interest Payout Options: Monthly, quarterly, and half-yearly intervals.
3. Eligibility: Open to both ordinary citizens and senior citizens.
4. Taxation: The interest earned is taxable as per the investor’s income tax slab.

Interest Rates:

• General investors: 7.25% per annum.
• Senior citizens: 7.75% per annum.

Central Bank of India’s Cent Super Time Deposit Scheme

Key Features:
The Cent Super Time Deposit is another special FD scheme offered by the Central Bank of India. It comes with an investment tenure of 555 days and provides a higher interest rate compared to regular FDs. Key highlights include:

1. Tenure: 555 days.
2. Minimum Deposit: Rs. 10,000.
3. Maximum Deposit: Rs. 10 crore.
4. Callable and Non-Callable Options: Investors can choose whether or not to allow premature withdrawal.
5. Eligibility: Open to both Indian citizens and NRIs.

Interest Rates:

• Callable FDs (ordinary citizens): 7.25% per annum.
• Non-callable FDs (ordinary citizens): 7.40% per annum.
• Callable FDs (senior citizens): 7.75% per annum.
• Non-callable FDs (senior citizens): 7.90% per annum.

Interest Calculation and Returns Comparison

To provide clarity on the potential returns, let’s compare the interest earned by ordinary citizens and senior citizens for specific investment amounts in both schemes. The examples below calculate returns for investments of Rs. 6,86,868 and Rs. 12,34,567 in both schemes.

1. SBI Amrit Vrishti FD: Rs. 6,86,868 Investment

• Ordinary Citizens:
  At an interest rate of 7.25% for 444 days, the interest earned will be Rs. 63,646. This brings the total maturity amount to Rs. 7,50,514.
• Senior Citizens:
  At an interest rate of 7.75% for 444 days, the interest earned will be Rs. 68,203. The total maturity amount becomes Rs. 7,55,071.

2. SBI Amrit Vrishti FD: Rs. 12,34,567 Investment

• Ordinary Citizens:
  At an interest rate of 7.25% for 444 days, the interest earned will be Rs. 1,14,396. The total maturity amount will be Rs. 13,48,963.
• Senior Citizens:
  At an interest rate of 7.75% for 444 days, the interest earned will be Rs. 1,22,586. The total maturity amount becomes Rs. 13,57,153.

3. Cent Super Time Deposit: Rs. 6,86,868 Investment

• Ordinary Citizens:
  At an interest rate of 7.25% (callable FD) for 555 days, the interest earned will be Rs. 79,294.83. The total maturity amount is Rs. 7,66,162.83.
• Senior Citizens:
  At an interest rate of 7.75% (callable FD) for 555 days, the interest earned will be Rs. 85,033.95. The total maturity amount becomes Rs. 7,71,901.95.

4. Cent Super Time Deposit: Rs. 12,34,567 Investment

• Ordinary Citizens:
  At an interest rate of 7.25% (callable FD) for 555 days, the interest earned will be Rs. 1,42,523.43. The total maturity amount is Rs. 13,77,090.43.
• Senior Citizens:
  At an interest rate of 7.75% (callable FD) for 555 days, the interest earned will be Rs. 1,52,838.84. The total maturity amount becomes Rs. 13,87,405.84.

Which FD Is Better? SBI Amrit Vrishti vs Cent Super Time Deposit

Interest Rates:

Both schemes offer competitive rates, but the Central Bank’s Cent Super Time Deposit has an edge with its non-callable option, offering up to 7.90% for senior citizens.

Tenure:

While SBI’s tenure of 444 days is shorter and may be preferred by those looking for quicker returns, the Cent Super Time Deposit’s 555-day tenure provides slightly higher returns for a longer lock-in period.

Flexibility:

SBI’s Amrit Vrishti FD allows monthly, quarterly, and half-yearly interest payouts, which can be beneficial for those seeking regular income. The Cent Super Time Deposit offers both callable and non-callable options, catering to different liquidity preferences.

Returns:

For both ordinary and senior citizens, the Cent Super Time Deposit outperforms SBI’s Amrit Vrishti FD in terms of absolute returns. For example, on an investment of Rs. 12,34,567, ordinary citizens earn Rs. 1,42,523.43 with Cent Super Time Deposit compared to Rs. 1,14,396 with SBI Amrit Vrishti FD.

Taxation:

Both schemes are subject to taxation as per the investor’s income tax slab, which slightly reduces the net returns.

SBI vs Central Bank of India – Conclusion

When deciding between SBI’s Amrit Vrishti FD and the Central Bank’s Cent Super Time Deposit, your choice should align with your investment goals, tenure preference, and liquidity needs. For those seeking higher returns and can commit to a slightly longer tenure, the Cent Super Time Deposit, especially its non-callable option, is the better choice. However, if you prefer shorter tenures and flexibility in interest payouts, SBI’s Amrit Vrishti FD may suit your needs better.

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Ultimately, both schemes provide secure and reliable investment opportunities, ensuring that your savings grow steadily while offering peace of mind. Whichever you choose, ensure it aligns with your financial goals and liquidity requirements to maximize your returns.

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