Govt Scheme: In today’s time, every person wants to invest their hard-earned money in such a place where the money is safe and the profit is also fixed. For this reason, people invest in different financial instruments. But if you want guaranteed returns by staying away from risk, then post office investment schemes can be a great option for you. One of these schemes is Post Office Time Deposit (POTD), which is a long-term, reliable means for savers.
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More attractive interest rates than bank FD
If we understand a post office time deposit in simple words, then it is a kind of fixed deposit. In this, investors can deposit their amount for a period of 1 year to 5 years. Interest rates vary according to the period. 6.9 percent interest is available on a one-year deposit, 7 percent on two and three-year periods, and 7.5 percent for five years. On the other hand, the country’s major banks like SBI, HDFC, ICICI, and Kotak Mahindra are currently offering a maximum interest rate of up to 6.6 percent. In this way, the interest received on a post office time deposit is more attractive.
Tax saving benefit also
If investors choose the 5-year time deposit scheme of the post office, they also get tax exemption under Section 80C of the Income Tax Act. This facility is the same as that given on tax tax-saving bank FD. However, the income from interest is taxable. The specialty of the post office is that its branches are present in small towns and villages of the country. Because of this, people living in remote areas can also easily take advantage of this scheme.
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Safe option for the nominee and heirs
Nominee facility is also provided in the post office time deposit account. If the single account holder dies, the deposit amount is received by the nominee or legal heir after claiming it. Similarly, in a joint account, the nominee receives the money upon the death of all the holders. If the number of heirs is less than three, they can continue the account in their name if they wish, provided they are eligible to open a new account in this scheme. In a joint account, upon the death of one of the holders, the remaining holders can continue the account or choose to close it.