The Post Office Time Deposit Scheme is a safe investment option, offering interest rates from 6.9% to 7.5% starting with ₹1000, and tax exemption on the 5-year term. There is no maximum limit, and accounts can be opened jointly or in the name of children. Investing for a longer duration yields better returns.
Post office time deposit scheme: If you wish to grow your money safely without any risk, the Post Office Time Deposit Scheme is an excellent option for you. This government-backed scheme allows you to open an account with just ₹1000 and invest for tenures ranging from 1 to 5 years. Interest rates from 6.9% to 7.5% and tax exemption on the 5-year term are its major attractions. Accounts can also be opened jointly or in the name of children above 10 years of age. However, premature withdrawal reduces the interest earned, making this scheme beneficial for those who can wait for the full term.
Can start with just ₹1000
The specialty of this scheme is that you can start investing with a very small amount. Anyone can open a Time Deposit account by depositing just ₹1000. There is no upper limit set for the amount deposited in this account. This means you can invest as much as you wish, according to your convenience and needs.
Option from 1 year to 5 years
A Time Deposit account can be opened for a tenure of one year, two years, three years, and five years. The interest rate depends on the investment tenure. The longer the period for which the money is deposited, the higher the interest you will receive. The highest interest is given on the 5-year account.
Interest rates better than bank FDs
Currently, the Post Office Time Deposit Scheme offers interest rates ranging from 6.9% to 7.5%. This rate is better than many banks' fixed deposit schemes. Since the Post Office is an institution directly linked to the Central Government, there is absolutely no risk of your money being lost. This is why experts also consider it a safe investment option.
Can open an account individually or with family
To invest in this scheme, an individual can open an account alone, or a joint account can be opened with any family member. If there is a child in the household who is over 10 years old, an account can also be opened in their name. This can help build a b fund for the child's future.
Also get tax benefits
If you invest in a 5-year tenure account, you can also avail tax benefits under Section 80C of the Income Tax Act. However, the rules for premature withdrawal are somewhat strict. No withdrawal can be made before six months. If the account is closed after six months but before one year, only interest equivalent to a savings account is provided. If the account is closed after one year, an interest rate of 2% less than the fixed rate is given.
Will earn approximately ₹30,000 interest on two lakhs
For example, if an individual invests two lakh rupees for a period of five years in the Post Office Time Deposit Scheme, they will receive approximately ₹29,776 in interest according to the fixed interest rate. This means after five years, the total amount in the account will be ₹2,29,776. This amount is quite useful for those who want to accumulate good money through safe investment.
Why is it the first choice for investors?
The Post Office Time Deposit Scheme is considered the first choice for investors because it offers three benefits simultaneously. First, the money remains completely safe. Second, the interest rates are stable and attractive. Third, tax exemption benefits are also available in the long term. This is the reason why this scheme continues to be consistently popular among investors in both urban and rural areas.
