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Post Office FD: Similar to banks, many schemes are operated in post offices too. One of them is known as post office time deposit. In simple words, we refer to it as Post Office FD. The post office offers options for FDs with a duration of 1 to 5 years. 7.5 percent is paid on 5-year FDs. Moreover, you also avail tax benefits under Income Tax Act 80C. If you want, you can make this scheme pay you interest and can earn twice the principal.
Understand the steps
In order to make your money triple in the post office, you need to opt for a 5-year FD. You must invest in this scheme and keep reinvesting before it matures. You have to do this reinvestment two times thereby running this FD for 15 years.
Over 20 lakh returns on an interest of 10 lakh.
Investing the principal amount of Rs 10 lakh into an FD with a 7.5% interest yields you Rs 4,49,948 after five years. Totaling to Rs 14,49,948, which after extending the scheme for another five years, you would receive Rs 11,02,349 in interest, bringing the total amount to Rs 21,02,349. This will require an additional extension before maturity, resulting in receiving Rs 20,48,297 in the 15th year and in return for the 10 lakh investment, the returns would be incredible.
On maturity, Rs 30,48,297 will be credited into your account.
The overall cumulative amount marvelously results in Rs 30,48,297 when the time deposit matures. In conclusion, proving to further benefitting the investor by providing additional interest surpassing the initial principal amount.
Here’s how you will go about getting an extension
You can extend the Post Office 1 year FD within six months after maturity, two years FD within a year of the maturity period, and for extending 3 and 5 year FD the post office has to be notified within one and a half years of the maturity period. Also, at the time of opening the account, you can seek account extension after maturity. The current interest rate for the corresponding TD account at the time of maturity will be applied for the extension period.
How much interest is there on the rest of the post office FDs
Unlike other Post office FDs, these come at different interest rates. The 1 year FDs accrue interest at 6.90% per annum, 2 year FDs at 7.00% per annum, 3 year FDs at 7.10% per annum, and 5 year FDs at 7.50% per annum.
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