The article compares the 5-year fixed deposit (FD) returns of two public sector banks, State Bank of India (SBI) and Punjab National Bank (PNB), on an investment of Rs 10 lakh.
For a 5-year FD, SBI offers an interest rate of 5.50% per annum for the general public and 6.30% per annum for senior citizens. On the other hand, PNB offers 5.30% per annum for the general public and 5.80% per annum for senior citizens.
Assuming an investment of Rs 10 lakh for 5 years, the returns can be calculated as follows:
For SBI:
- For the general public: Rs 10 lakh 5.50% 5 years = Rs 2,75,000 (interest earned) + Rs 10 lakh ( principal) = Rs 12,75,000 (total amount after 5 years)
- For senior citizens: Rs 10 lakh 6.30% 5 years = Rs 3,15,000 (interest earned) + Rs 10 lakh (principal) = Rs 13,15,000 (total amount after 5 years)
- For PNB:
- For the general public: Rs 10 lakh 5.30% 5 years = Rs 2,65,000 (interest earned) + Rs 10 lakh (principal) = Rs 12,65,000 (total amount after 5 years)
- For senior citizens: Rs 10 lakh 5.80% 5 years = Rs 2,90,000 (interest earned) + Rs 10 lakh (principal) = Rs 12,90,000 (total amount after 5 years)
From the above calculations, SBI offers higher returns on a 5-year FD for both the general public and senior citizens, compared to PNB. The difference in returns between SBI and PNB for the general public is Rs 10,000 ( Rs 2,75,000 – Rs 2,65,000), and for senior citizens, it is Rs 25,000 ( Rs 3,15,000 – Rs 2,90,000).
Therefore, if an individual invests Rs 10 lakh in a 5-year FD, SBI provides better returns compared to PNB, with a higher total amount after 5 years for both the general public and senior citizens. However, it’s essential to note that interest rates are subject to change, and individuals should check the current rates before investing. Additionally, other factors such as liquidity, tax implications, and bank stability should also be considered before making a decision.