Almost all the saving schemes of the post office (Post Office Saving Schemes) are ahead of the banks in terms of returns. These include good interest from investing in Post Office Time Deposit, Public Provident (PPF) and National Saving Certificate (NSC) as well as the tax deduction benefits under Section 80C of the Income Tax Act.
New Delhi. Most people in the country rely more on schemes run by banks for investment. Among these, the Fixed Deposit (Bank FD) schemes of banks are the most preferred. If you want to make more profit from bank FD then investing in Post Office Saving Schemes can be a better option. Actually, almost all savings schemes of the post office get more interest from fixed deposits. Among these, three savings schemes of the post office are special because they get more interest as well as the benefit of Income Tax Deduction on investment of up to Rs 1.5 lakh under Section 80C of Income Tax Act. Banks pay up to 5.5% on FDs of 5 years or more
These three savings schemes of the post office, which provide the benefit of tax deduction, include Post Office Time Deposit, Public Provident Fund (PPF) and National Savings Certificate (NSC). Explain that banks get a maximum of 5.5 percent interest on fixed deposits of 5 years or more. State Bank of India (SBI) pays 5.4 per cent on FDs above 5 years, HDFC Bank (HDFC) at 5.5 per cent and ICICI Bank (ICICI) at 5.25 per cent. At the same time, you will get 6.8 percent interest on investing in post office time deposit.
6.8% interest on 5 years investment in PO time deposit
Apart from banks, any person can also make a fixed deposit at the post office. This is called post office time deposit. However, in banks you can get FDs for a minimum of 7 days to 28 days, from fixed deposits maturing in 10 days to 10 years. At the same time, time deposit in post office has to be made for at least 1 year and more than 5 years. The post office amends the rate of interest received on it after every third month. The interest rates on time deposits of the post office are effective from 1 April 2021. The post office pays 5.5% interest on time deposits of 1, 2 and 3 years. At the same time, investing for 5 years earns interest at the rate of 6.8 percent.
Guaranteed Return of 6.8% per annum on NSC is guaranteed by investing in National Savings Certificate for 5 years. At present, interest is being paid on NSC at the rate of 6.8 percent per annum, which is available on completion of maturity. The return on this is calculated on compound interest annually. With this, the investors get excellent returns on maturity. In this, the amount received on maturity is taxable. However, when you invest the interest amount again in it, it becomes tax free. In this, you can deposit at least 1000 rupees. In this scheme, any person can open many accounts. Not only this, you can also open three joint accounts in it.
Public Provident Fund (PPF) can be opened in post offices as well as banks. It is one of the long term debt investment products. Investors in PPF get guaranteed tax-free returns, which you do not get in other long term investment options like NPS, mutual funds. An investment of up to Rs 1.5 lakh every year in PPF gets the benefit of income tax exemption under Section 80C. PPF gets tax rebate on both the interest and maturity amount. It also provides loan facility on PPF account. It is beneficial for those taking a short-term loan. PPF investment is considered to be the best option for self-employed professionals and EPFO employees. Investors have to open it for 15 years.
