Like banks, the Post Office also runs various schemes and you get good interest in them. One of those schemes is the Post Office Time Deposit scheme, which we call Post Office FD in the common language. In the Post Office, you get options for FDs with tenures of 1, 2, 3, and 5 years. The interest rate is different according to tenure. But if you want to invest for higher profits, then invest in FDs with a tenure of 5 years. In this, you will get the benefit of a higher interest rate, as well as tax benefits. But if you are investing in this, 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 at present 7.5 percent 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, on maturity, you will get ₹7,24,974. Apart from this, you will also get tax benefits on this FD under section 80C.
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 big 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 your investment as per the interest rate applicable to a savings account. Currently, 4% interest is being given on post office savings accounts.
On the other hand, if you close the FD after one year, then your money will be refunded after deducting 2% interest from the current interest rate applicable to the time deposit. 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 accounts.
Whatever interest rate will be 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 collected 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. An account can be opened for children by 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 name.
If you open a time deposit account for 5 years, then you can get tax exemption on the money deposited in it under section 80C.
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