In the realm of secure savings options, the post office emerges as a reliable choice, offering various small savings schemes and Fixed Deposits (FDs).
One of its standout options is the Time Deposit Scheme (TD Account) of the post office, offering more competitive interest rates than the State Bank of India (SBI).
This scheme allows you to park your funds for 1 year, 2 years, 3 years, and 5 years, with the promise of substantial returns.
Earn 7.5 Percent Interest
Under the Post Office Time Deposit scheme, investors receive an attractive annual interest rate of 7.5 percent on deposits locked in for 5 years.
If you opt for a shorter duration, such as 1-3 years, you can still benefit from a respectable interest rate of 6.90 percent.
However, the most significant advantage is reaped with a 5-year deposit, which earns you a generous 7.5 percent interest rate.
When Will Your Money Double?
If you decide to invest your money in the Time Deposit scheme and enjoy a 7.5 percent interest rate, it will take approximately 9 years and 6 months, equivalent to 114 months, for your invested capital to double.
Example:
- Deposit: ₹5 lakhs
- Interest: 7.5 percent
- Maturity Period: 5 years
- Amount on Maturity: ₹7,24,974
- Interest Earnings: ₹2,24,974
Account Eligibility
This scheme is open to single individuals, and it also allows joint accounts, with up to three adults permitted to open an account together.
Furthermore, parents can establish an account in the name of children aged 10 years or older.
Benefits of Time Deposit
Apart from the lucrative interest rates, the Time Deposit scheme offers additional advantages.
Investors can enjoy tax exemption under Section 80C of the Income Tax Act 1961, adding a layer of tax efficiency to their investments.
Additionally, the scheme provides a provision for nomination during the account opening process.
However, it’s important to note that a penalty is imposed for premature withdrawals, so investors should carefully consider their financial commitments before investing.
