There are many schemes of the post office, in which you get the benefit of better interest rates. One such scheme is Post Office Time Deposit. Through this scheme, you can earn a good profit. But if you make a mistake, you can also incur a huge loss.
Post Office TD Scheme: Post Office also runs many schemes like banks and you get good interest on them. One of those schemes is Post Office Time Deposit Scheme, which we call Post Office FD in common language. In the post office, you get options of FDs with tenures of 1, 2, 3 and 5 years. The interest rate on all is different according to the tenure. But if you want to invest for more profit, then invest in FDs with tenure of 5 years. In this, you will get the benefit of higher interest rate, as well as tax benefits. But if you are investing in it, then do not make the mistake of breaking it before 5 years, otherwise you will have to bear a big loss.
This FD will make ₹5,00,000 into ₹7,24,974 in 5 years
First of all, if we talk about profit, then currently 7.5% interest is being given on time deposit. In such a situation, if you invest ₹ 5,00,000 in it, then in 5 years you will get ₹ 2,24,974 from interest only. In such a situation, after 5 years, you will get ₹ 7,24,974 on maturity. Apart from this, you will also get tax benefit under section 80C on this FD.
If you break it before time, there will be a big loss
If you want to earn good profit from this FD, then do not break it before the completion of the tenure, otherwise you will suffer a huge loss. According to the rules, if you close a 5-year tenure FD account after 6 months but before the completion of 1 year, then you will get a refund on the investment at the interest rate applicable on savings account. Currently, the interest rate on post office savings account is 4%.
If you close the FD after one year, then your money will be refunded after deducting 2% interest from the current interest rate applicable on time deposits. That is, if you are getting interest at the rate of 7.5%, then in case of pre-mature closure, this interest will be reduced to 5.5%.
What are the interest rates of Post Office TD
One year account – 6.9% annual interest
Two year account – 7.0% annual interest
Three year account – 7.1% annual interest
Five year account – 7.5% annual interest
Special things related to Post Office Time Deposit
You can deposit a minimum of Rs 1000 in Post Office Time Deposit and there is no maximum limit.
You can open as many accounts as you want, there is no restriction on the account.
Whatever interest rate is there at the time of opening the account, the same interest rate will remain applicable till the completion of the account period.
The interest on your investment in Post Office Time Deposit is calculated on the basis of quarterly compounding but this interest is accumulated and deposited in your account at the end of the year.
The interest will be deposited in your account after completion of exactly one year from the date on which you opened the account.
Any person of 18 years of age can open a TD account. Accounts can be opened for children on behalf of their parents or guardians.
A child who has completed 10 years of age can operate his account with his signature. He can also open this account in his own name.
If you open a time deposit account for 5 years, then you can avail tax exemption on the money deposited in it under section 80C.
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