Post Office scheme: If you are also looking for a safe investment and guaranteed income option for 5 years, then the post office term deposit is a better option.
Post Office scheme: The government has increased the interest rates of select small savings schemes from January 1, 2023. This will increase the profit for investors earning guaranteed earnings without taking any market risk. If you too are looking for an investment option of safe and guaranteed income for 5 years, then the post office term deposit scheme is a better option. On January 1, 2023, 7 percent interest is being received on 5-year term deposits. In this, the investor gets the benefit of compounding. If you continue investing in this scheme for a long time, then your money can double or more than double.
Interest on ₹ 5 lakh deposit above ₹ 5 lakh
According to the information available on the post office website, interest is being received at the rate of 7 per cent on 5-year FD. Suppose you invest ₹ 5 lakh in this scheme for 5 years, then on maturity this amount will be Rs 7,07,389. That is, on Rs 5 lakh you will get Rs 2,07,389 as interest. If you extend this FD for 5 more years, then this amount will become Rs 10,00,799 i.e. you will get Rs 5,00,799 as interest. In this case your amount will double.
You can deposit money in Post Office Fixed Deposit for 1 year, 2 years, 3 years and up to 5 years. But, if the term deposit can also be extended. The condition in this is that as many years as the scheme is, it increases for the same number of years. For example, if 5 years FD is done, then before maturity it can be extended for further 5 years.
Tax benefit under section 80C
Under Section 80C of the Income Tax Act, the benefit of tax deduction up to 1.5 lakh is available on 5-year FD in the post office. But, keep in mind that if the interest income is 40 thousand or more, then TDS will be deducted. The limit for senior citizens is 50 thousand. You can get more than 1 FD done in the post office. FD account can also be joint. Apart from this, you can easily transfer one of your schemes to another scheme.
Post Office deposits cannot be withdrawn before 6 months from the date of deposit. If you close your TD account after 6 months and before 1 year, you will get interest as applicable to post office savings account. Apart from this, if you close the TD of 2/3/5 after 1 year, then you will get 2% less interest than the application interest.
