Post Office Time Deposit: Like banks, you also get the option of FD in post office. Different interest is given on FDs of different tenures. But if you want, you can more than triple your money through the Fixed Deposit scheme of the post office. Let us tell you how you can convert ₹5,00,000 into ₹15,24,149 through FD.
Know how much interest is being given on Post Office FD
FD options are available in the post office for 1, 2, 3 and 5 years. 6.9% interest is being given on 1 year FD, 7.0% interest on 2 year FD, 7.1% interest on 3 year FD and 7.5% interest on 5 year FD.
How will the amount be tripled
If you want to convert ₹5,00,000 into a return of ₹15,24,149, then you will have to first invest in a 5-year FD and extend this FD twice for 5 years each, i.e. the FD will have to be continued for 15 years.
How will it become ₹15,24,149, understand with an example
If you invest Rs 5,00,000 in FD, then in the first 5 years you will get a return of Rs 2,24,974 at the rate of 7.5% interest and the maturity amount will be Rs 7,24,974. You have to extend it for the next 5 years. After the extension, you will get Rs 3,26,201 as interest and the maturity amount will be Rs 10,51,175. You will have to extend this FD again for 5 years for the second time. In the 15th year, you will get an interest of Rs 4,72,974 and your maturity amount will be Rs 15,24,149. In this way, in 15 years, you will earn a total of Rs 10,24,149 on your investment only from interest.
Rules for extending
1 year FD can be extended within 6 months from the date of maturity, 2 year FD within 12 months of maturity period and for extension of 3 and 5 year FD, information has to be given within 18 months of maturity period. Apart from this, you can request account extension after maturity at the time of opening the account. If you want, you can put the extension request at the time of account opening itself.
How much interest is received on extension
The same interest is paid on the extended account which is applicable on the respective TD account on the day of maturity. For example, if you invest in FD for 5 years this month, then 7.5% interest will be paid. In such a case, you will get returns on the extended account as per the same interest rate. Even if the interest rate on 5-year FD changes at that time, it will not affect your FD.
