If you are looking for better returns with a safe investment, you can benefit from several schemes offered by the Post Office. Unlike banks, the Post Office provides many schemes that offer higher interest rates. Investing in the Post Office is also simple, as you can open a savings account with just ₹500.
Currently, the Time Deposit Account (Post Office TD) is an excellent scheme available in the Post Office. It offers interest rates ranging from 6.9% to 7.5%, which are significantly higher than those offered by banks. You can start a Time Deposit (TD) account at the Post Office with a minimum investment of just ₹1,000. There is no maximum investment limit in this.
What is the Scheme?
Under the Time Deposit Account scheme of the Post Office, different interest rates are offered based on the investment tenure:
- 6.9% for a 1-year deposit,
- 7.0% for 2 years,
- 7.1% for 3 years, and
- 7.5% for a 5-year deposit.
This interest is calculated quarterly but is paid annually. Compared to bank savings accounts, the interest in this scheme is considerably higher.
Example of Earnings
If you invest in a 5-year Post Office FD, you will receive an interest rate of 7.5%. For example, depositing ₹5 lakh in the Time Deposit Account for 5 years will earn ₹2,24,974 as interest. At maturity, you will receive ₹7,24,974 in total.
Extend Your Investment for Better Returns
If you extend your FD for another 5 years, the total interest will amount to ₹5,51,175, making your total maturity amount ₹10,51,175 after 10 years. This means you will earn more than double your principal investment over 10 years.
Account Opening for Children
Parents can open an account in their child’s name. If the child is above 10 years of age, they can operate the account themselves. Additionally, there is no limit to the number of accounts you can open under this scheme. A joint account facility is also available, and you can convert a joint account into a single account at any time.
National Savings Certificate (NSC)
The Post Office offers a 7.7% return on the 5-year National Savings Certificate (NSC). Investments in NSC qualify for tax exemption under Section 80C of the Income Tax Act. However, it comes with a 5-year lock-in period, meaning funds cannot be withdrawn before this duration.
Double Your Money with Kisan Vikas Patra (KVP)
The Kisan Vikas Patra (KVP) is a scheme where your money doubles in 115 months (9 years and 7 months). The government currently offers a 7.5% annual interest rate on KVP, making it an attractive long-term investment option.