Post Office Scheme: Government savings schemes provided by the Post Office are well-liked for their secure investments and strong returns. These schemes enable the accumulation of significant funds through small savings while offering a reliable income source. One notable savings scheme is the Post Office National Savings Certificate Scheme (PNSC), which can yield up to Rs 5 lakh from interest alone. Let’s delve into the detailed calculations…
Advantages of Post Office savings schemes:
Zero risk, high interest
Post Office savings schemes are risk-free as they are backed by the government, ensuring the safety of investments regardless of their size. The interest rate for the Post Office National Savings Certificate Scheme is 7.7% per year.
Accounts for children
Post offices provide savings schemes for various age groups, including children, the elderly, youth, and women. These schemes allow for investments starting from minimal amounts. Parents can open accounts for children under 10 years of age under the PO NSC scheme.
Open an account with just Rs 1000
You can initiate investment in the Post Office NSC with as little as Rs 1,000, with no upper limit on the investment amount. The interest is compounded and credited to the investor’s account upon maturity. To fully benefit from the scheme, it must be maintained until maturity to receive the full interest payment.
Closing the account before maturity:
– If the account is closed before maturity, the interest earned through compounding will not be paid out. The scheme rules allow for early closure for investor convenience, but closing the account after one year will result in only the principal amount being refunded, with no interest paid.
Earning over Rs 5 lakh in interest:
To accumulate over Rs 5 lakh in interest alone, using the Post Office NSC calculator, you would need to invest Rs 11.50 lakh when opening the account and maintain it for the full maturity period of five years. At an annual interest rate of 7.7%, the total amount would grow to Rs 16.66 lakh after five years, with interest earnings through compounding totaling Rs 516,389.