Post Office Fixed Deposits: In the recent past, interest rates on fixed deposits (FDs) have been increased by banks, which has made it more attractive for fixed income seekers.
With the recent hike in interest rates, fixed deposits have now become an inflation-beating option after a long time. A good way to build a strong FD portfolio is to include short and long term FDs in your portfolio instead of investing all your money in a single scheme. Invest a portion in a 5-year FD, where tax benefits are available under Section 80C of the Income Tax Act.
Invest the remaining money in different short term FDs keeping in mind the liquidity. If you wish to do so, you can go for the Post Office Time Deposit Scheme, where 4 options of different tenures will be clubbed together.
1 year to 5 year option
Post Office Fixed Deposit Scheme is a type of fixed deposit. There is an option to do FD of 1 year, 2 years, 3 years and 5 years. Up to 7.5 percent annual interest is being received in these different tenure schemes. For investors who do not want to take any market risk and are looking for stable returns while keeping their deposits safe, Post Office Time Deposit Scheme is a better option.
1 year TD: 6.8% interest per annum
Deposit: Rs 10 lakh Tenure: 1 year Interest: 6.8% per annum Maturity amount: Rs 10,69,754 less interest: Rs 69,754
2 Year TD: 6.9% interest per annum
Deposit: Rs 10 lakh Tenure: 2 years Interest: 6.9% p.a. Maturity Amount: Rs 11,46,625 Less Interest: Rs 1,46,625
3 years TD: 7% interest per annum
Deposit: Rs 10 lakh Tenure: 3 years Interest: 7% p.a. Maturity Amount: Rs 12,31,439 Interest less: Rs 2,31,439
5 years TD: 7.5% interest per annum
Deposit: Rs 10 lakh Tenure: 5 years Interest: 7.5% p.a. Maturity amount: Rs 4,49,948 Interest loss: Rs 3,83,000
Scheme Features and Benefits
It has the facility to open single and joint accounts. Joint account can have up to 3 adults. The special feature of this scheme is that an investor can open multiple accounts. An account can be opened in any post office by depositing at least Rs.1000. There is no limit on the maximum deposit. In this scheme, the benefit of tax exemption is available on the investment made for 5 years. Keeping the account as security, you can also take a loan against it. There is no risk in having government deposits. The account can be transferred from one post office to another post office. Safer than bank FD
It is a safer investment than bank FDs, as it offers a government guarantee on the investor’s capital and the interest earned. At the same time, according to the rules of Deposit Insurance and Credit Guarantee Corporation (DICGC), in bank FD, you get protection up to a maximum of Rs 5 lakh on capital and interest.
Facilities available in Post Office TD
Nomination facility in Post Office TD Facility to transfer account from one post office to another post office Facility to open multiple TDs in same post office Facility to convert single account to joint or joint account to single Account extension facility Intra operable Netbanking/Mobile Banking Online account opening facility through
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