Are you a fan of Post Office schemes? Planning to invest in something? Then this article is for you. Like the bank, many types of schemes are also run in the post office. There are some schemes on which better returns than the bank are available in the post office. Post office time deposit is also one of them. In common language, it is called Post Office FD.
Post Office time deposit scheme
Post Office offers FD options for 1, 2, 3, and 5 years. If you invest in a 5-year FD in the post office or have already invested in it, then you can earn a lot of interest and make your amount more than double; that is, you can earn more than the original amount. However, for this, you have to do one thing.
Make your money double
The post office scheme offers different interest according to the tenure. If you invest in a one-year FD, you get 6.9% interest on a two-year FD, 7% on a three-year FD, and 7.5% on a five-year FD. But if you want to more than double your amount, then you have to invest in the first 5-year FD and extend this FD for the next 5 years. Tax benefit is also available on 5-year FD.
If you invest in a post office FD for 5 years, then you will get interest at the rate of 7.5%. According to the post office calculator, on an investment of Rs 5,00,000, you will get Rs 2,24,974 as interest in 5 years, i.e., a total of Rs 7,24,974 on maturity. But if you extend it once, i.e., 5 years, and continue, then in a total of 10 years you will get an interest of Rs 5,51,175 on it. That is, your interest will be greater than your original. In 10 years, you will be the owner of Rs 10,51,175.
Extension Rules
Post Office Time Deposit Account can be extended within the stipulated period as mentioned herein from the date of maturity. A 1-year FD can be extended within 6 months from the date of maturity, a 2-year FD within 12 months of the maturity period, and an extension of 3 and 5-year FDs within 18 months of the maturity period. Apart from this, while opening the account, you can also request an account extension after maturity. The interest rate applicable to the respective TD account on the day of maturity will be applicable for the extended period.