Outlook Money
It is also known as the Post Office Fixed Deposit (FD) and is considered a secure savings scheme offered by India Post. It has no upper limit but requires an initial investment of Rs. 1,000, with returns guaranteed for terms of 1, 2, 3 and 5 years.
Due to dependability, accessibility and provision of tax incentives under Section 80C of the Income Tax Act, this program is highly preferred, especially in rural regions.
1-year Post Office FD: In the first year of FD, 6.9% is the interest rate. If one puts Rs 5 lakh in this FD, the interest earned over a year will be Rs 35,403 for a total of Rs 5,35,403 at maturity.
On the 2-year Post Office Fixed Deposit, the yearly interest rate is 7.0%. For example, for an investment of Rs 10 lakh, the interest received will be Rs 1,48,882, with a maturity of Rs 11,48,882.
In the 3-year Post Office FD, an interest rate of 7.1% is offered, and a Rs 5 lakh investment accumulates Rs 1,17,538 in interest resulting in a maturity amount of Rs 6,17,538. With a three-year maturity of Rs 18,52,613, an investment of Rs 15 lakh yields interest of Rs 3,52,613.
The 5-year Post Office FD offers the highest interest rate at 7.5% annually. A Rs 15 lakh investment will generate Rs 6,74,922 in interest with a maturity amount totalling Rs 21,74,922 at the end of the 5 years.
Post Office Time Deposit (POTD) investments do not have any tax deduction at source (TDS). However, the interest earned is added to the depositor’s annual income and taxed accordingly.
Compiled by Syed Muskan