Post Office savings schemes are always a place of trust for middle-class investors who want safe and assured returns. Because the government directly guarantees the safety of these schemes. That is why the demand for Post Office Time Deposit schemes is increasing in the list of ‘risk-free’ investments. Now know how it is possible to earn more than 2 lakh rupees from interest alone.
A lump sum amount can be deposited in Post Office Time Deposit for different periods ranging from 1 to 5 years. The investor can open an account for 1 year, 2 years, 3 years or a maximum of 5 years as per his convenience. The interest rate also changes according to the period. Currently, the Post Office is offering an interest of 6.9% for 1 year, 7% for 2 years, 7.1% for 3 years and a maximum of 7.5% for 5 years.
Now let’s come to the calculation of interest on more than 2 lakh rupees. If an investor deposits 4.5 lakh rupees for 5 years, then at the end of the period at the rate of 7.5%, a total of 6,52,477 rupees will be deposited in his account. Out of this amount, the interest income will be around Rs 2,02,477. That is, almost half of the capital is additional profit.
Similarly, if Rs 2.5 lakh is kept for 5 years, then the interest will be Rs 1,12,487. The more the investment, the more the return will increase, that is the main principle of this scheme. So if you plan to make a one-time investment in the long term, there is a chance of getting stable profit in this scheme.
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However, for those who want to earn interest of Rs 2 lakh quickly, there is also a 3-year option. The calculation says that if Rs 10 lakh is kept for 3 years, then the total interest will be Rs 2,35,075 at an interest rate of 7.1%. At the maturity, you will get Rs 12,35,075.
This scheme is also profitable in terms of tax benefits. Tax exemption is available on investment in post office time deposits under Section 80C of the Income Tax Act. An account can be opened with a minimum of Rs 1,000. Both single and joint accounts are available. There is no limit on the maximum investment.
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Investors should remember that the government reviews the interest rates of small savings schemes every three months. This rate may increase or decrease as per the decision of the Finance Ministry. However, the safety and stability of the post office scheme still keeps it as one of the most popular government-backed investments.
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In summary, the Post Office Time Deposit Scheme is a very profitable option for long-term financial planning due to its risk-free guaranteed returns, tax exemptions and flexible tenure. New investors can also easily ensure stable and assured income by putting money in this scheme.
