If you are looking for a safe investment, then the Post Office Time Deposit Scheme is the best option for you. It is also called a fixed deposit, and its most special feature is that it comes with a full government guarantee. This is why it is considered safer than a bank FD.
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Investment options and interest rates
In Post Office Time Deposit, the investor gets the option of four types of tenure. 6.9 percent interest is given on a 1-year deposit, 7.0 percent interest is given on a 2-year deposit, 7.1 percent interest is given on a 3-year deposit, and 7.5 percent annual interest is given on a 5-year deposit. Due to these interest rates, investors not only get safe but also attractive returns.
Calculation of the return on investment of Rs 25 lakh
If an investor makes an FD of Rs 25 lakh for 5 years, then he will get a maturity amount of Rs 36,24,870 at an interest rate of 7.5 percent. That is, there will be a total benefit of Rs 11,24,870.
Similarly, a maturity amount of Rs 30,87,688 will be available on a 3-year FD, Rs 28,72,204 on a 2-year FD, and Rs 26,77,015 on a 1-year FD.
Tax exemption and TDS rules
Another big advantage of investing in post office time deposits is that a 5-year FD gets a rebate of up to Rs 1.5 lakh under Section 80C of the Income Tax Act. However, if the interest income exceeds Rs 40 thousand annually, then TDS will be deducted. For senior citizen investors, this limit is Rs 50 thousand.
Special Features and Liquidity
Investors can open both single and joint accounts in this scheme. A maximum of three adults can be included in a joint account. A single investor can also open multiple accounts. This account can be started by depositing only Rs 1000, and there is no maximum investment limit. Apart from this, a loan can also be taken by keeping this account as security.
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Better security than a bank FD
Bank fixed deposits provide security of up to Rs 5 lakh as per DICGC rules. Whereas post office time deposits are fully guaranteed by the government. This is the reason why this scheme is considered safe and reliable for everyone, from small to big investors.