Post Office Scheme: If you’re looking for a risk-free investment with a decent return, the Post Office Time Deposit Scheme could be a strong option. You can start with just Rs 1,000. There’s no upper limit on the amount you can deposit. Deposits under this scheme are available for one to five years. The longer you hold your money, the higher the interest rate. Investing for five years yields the highest interest.
Bank FD offers higher returns
This post office scheme offers interest rates ranging from 6.9% to 7.5%. This rate is better than most bank FDs. The special thing is that the post office is a government-affiliated institution, so there’s no risk of losing money. Experts often advise investing a portion of your investment in safe options, where lower returns are acceptable but losses are avoided. Under this scheme, you can open an account individually or jointly with a family member. If you have a child over 10 years of age, you can also open an account in their name. This will help them build a substantial fund for their future.
Tax exemption in 5 years, strict rules on early withdrawal
If you invest in this scheme for the full five years, you also receive tax benefits. However, there are some important rules for withdrawing funds from this scheme. Withdrawals cannot be made before six months. If you close the account after six months and before one year, you will only receive interest equal to that of a savings account. Furthermore, if you close an account with a two, three, or five-year maturity period after one year, you will receive two percent less than the fixed interest rate. Therefore, this scheme is more beneficial for those who can wait the full term.
You will get interest of about thirty thousand on Rs 2 lakh
Suppose you deposited Rs 2 lakh in the Post Office Time Deposit Scheme for five years. At the fixed interest rate, you would earn a total of Rs 29,776 in interest. This means that after five years, you would have a total of Rs 229,776 in hand. This clearly shows that this scheme is very useful for those who want to accumulate a substantial amount of wealth without any risk.