Post Office FD Schemes: Investing in the time deposit scheme at the post office gives almost double the interest compared to a bank current account, and the investment remains completely safe.
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You don’t want to keep your money in the bank because it offers low interest rates. Investing in the stock market and mutual funds is also risky. If you have this mindset, you can take advantage of these Post Office schemes, where your investment will be completely safe and you will receive high returns.
In fact, you can make a fixed deposit (FD) at the post office, just like you can at a bank. Post office investing is also easy because you can open a savings account for just ₹500.
The Time Deposit Account is currently an excellent scheme offered at the Post Office. It offers an interest rate of 6.9% to 7.5%, which is significantly higher than bank rates. You can open a Time Deposit (TD) account at the Post Office for just Rs 1,000.
Opening this account is very easy. You can deposit money for a period of 1 to 5 years. You simply need to visit your nearest post office. There is no maximum investment limit.
What is a time deposit scheme?
Post office time deposit accounts offer 6.9% interest on deposits for one year, 7.0% for two years, 7.1% for FDs up to three years, and 7.5% for investments with a 5-year term. This interest is calculated quarterly, though paid annually. Compared to bank savings accounts, this scheme offers nearly double the interest rate.
If you invest in a Post Office FD for 5 years, you will earn 7.5% interest. A 5-year fixed deposit of Rs 5 lakh in the Post Office Time Deposit Account scheme will earn you Rs 2,24,974 in interest. This means you will receive a total of Rs 7,24,974 upon maturity after 5 years. If you extend this term and make another FD for another 5 years, you will earn a total interest of Rs 5,51,175 after 10 years, which will be more than your principal. In this case, you will own Rs 10,51,175 in 10 years.
You can also open an account in your child’s name.
Parents can open an account in their children’s name. If the child is over 10 years old, they can operate the account themselves. Furthermore, you can open as many accounts as you wish under this scheme. The scheme also offers the option of opening a joint account. Furthermore, you can convert your joint account into a single account at any time.
National Savings Certificate (NSC)
Additionally, the 5-year National Savings Certificate (NSC) at the post office offers a 6.7% return. Investments in these are also eligible for tax exemption under Section 80C of the Income Tax Act. However, there is a five-year lock-in period, meaning you cannot withdraw the funds before five years.
Money doubles in 115 months.
Furthermore, investing in Kisan Vikas Patra (KVP) will double your money in 115 months (9 years and 7 months). Currently, the government has fixed the interest rate on KVP at 7.5% per annum.
Read more: Could Indian Rupee Ever Hit 150 Against US Dollar? Expert Report
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