Post Office TD Scheme: If you’re seeking a guaranteed return on your lump sum deposit without any risk, the term deposit scheme offered by the post office is an excellent choice.
Starting from April 1, 2023, you can enjoy an annual interest rate of 7.5 percent on a 5-year Post Office Time Deposit Account. This scheme pays interest annually while compounding it quarterly. Additionally, account holders can avail the benefit of tax deduction up to ₹1.5 lakhs under section 80C of the income tax.
Not just limited to 5 years, you also have the option to invest in post office term deposits with maturity periods of 1, 2, and 3 years. Once the deposit matures, you can reinvest it for the same duration.
Post Office: Deposit a Lump Sum of 5 Lakhs, Get Guaranteed 10 Lakhs
Starting from April 1, 2023, customers can enjoy a 7.5 percent interest rate on a 5-year fixed deposit (FD) with the post office. According to the Post Office FD Calculator 2023, if you make a deposit of Rs 5 lakh, you will receive Rs 7,24,974 upon maturity. Out of this, Rs 2,24,974 will be earned as interest. Moreover, you can extend this scheme for an additional five years after maturity. As a result, your lump sum deposit of Rs 5 lakh will grow to Rs 10,51,175 in 10 years, with an interest income of Rs 5,51,175. Essentially, your investment here is guaranteed to double in 10 years.
Post Office TD Scheme: Review of Interest Rates Every Quarter
Post Office Time Deposit offers both single and joint account options. A joint account can include up to 3 adults, and the minimum deposit to open the account is Rs 1000. Additional investments can be made in multiples of Rs 100. There is no investment limit for Post Office TD. The interest rates on small savings, including Post Office TD, are reviewed by the Finance Ministry every quarter. This ensures that the rates remain competitive and beneficial for investors.
Post Office TD: Tax Deduction Benefit
Investing in a 5-year FD with the post office offers the advantage of tax exemption. You can claim a tax deduction on investments up to Rs 1.5 lakh under section 80C of the income tax act. However, it’s important to note that the amount received on maturity of the FD is taxable. The interest rates for Post Office TD are 6.8 percent for 1 year, 6.9 percent for 2 years, and 7.0 percent for 3 years. In this scheme, the interest is calculated on a quarterly basis, but the payment is made annually. This makes it a convenient option for individuals looking to save on taxes while earning steady returns on their investments.