In this post office scheme, you get maximum interest of 7.5 percent. This is more than the interest available on FDs of many banks. Children below 10 years can also invest in this scheme.
New Delhi. Post Office Time Deposit Account, a scheme run by the Post Office, can be started for Rs 1000. Currently the interest rates under this scheme are 6.9 percent, 7.0 percent, 7.1 percent and 7.5 percent. This interest rate will remain effective till March 31, 2024. This scheme is offering better returns than many FDs. SBI is offering 6.50 percent annual interest on 5 year FD, whereas, in Post Office Time Deposit Scheme, 7.5 percent interest is available on 5 year deposit.
In time deposit scheme, the investor is given the opportunity to make short term and long term investments. In this scheme you can deposit money for 1 year, 2 years, 3 years and 5 years. Any Indian citizen can open his account in Post Office Time Deposit Scheme. Not only this, 3 adults can also open a joint account. Parents can also open a time deposit account in the name of children above 10 years of age. The minimum investment amount is Rs 1,000.
Rate of interest
Post offices offer time deposits for tenures of 1 year, 2 years, 3 years and 5 years. Like bank FD, investors can get guaranteed returns from Post Office Time Deposit Scheme.
1 year – 6.90 percent
2 years – 7.00 percent
3 years – 7.00 percent
5 years – 7.50 percent
Benefit of tax exemption
The amount invested in a time deposit account with a tenure of 5 years in the post office also gets the benefit of tax exemption under Section 80C of the Income Tax Act, 1961. However, tax benefits are not being availed on deposits with tenure shorter than this. Money can be withdrawn even before the maturity of the time deposit, but there is a penalty.
How much will you get back on an investment of Rs 5 lakh?
If you invest money in post office time deposit for five years, you will get ₹ 7,24,974 including interest after five years. That means you will get ₹ 2,24,974 as interest in five years. Similarly, if you invest money for three years, you will get ₹ 6,17,538 on maturity of the time deposit. This amount will be Rs 500000 as principal and Rs 1,17,538 as interest.
