Investing in a post office scheme is considered safe, similar to bank investments, as the government guarantees the safety of your funds.
Among various schemes, the Post Office Time Deposit, commonly known as Post Office FD, offers a compelling option for long-term savings.
Currently, a 7.5% interest rate is available for a 5-year FD, which also provides tax benefits under Section 80C of the Income Tax Act. Here’s how you can potentially triple your investment.
The Strategy to Triple Your Money
To triple your money through the post office scheme, follow these steps:
- Invest in a 5-Year FD: Start by investing ₹10,00,000 in a 5-year Time Deposit.
- Extend Your FD: Before the initial 5-year term matures, you must extend the FD for another 5 years. Repeat this process twice. This means you will maintain your FD for a total of 15 years.
Financial Breakdown
First 5 Years:
Initial Investment: ₹10,00,000
Interest Earned: ₹4,49,948
Total Amount after 5 Years: ₹14,49,948
Next 5 Years:
Interest Earned in 10 Years: ₹11,02,349
Total Amount after 10 Years: ₹21,02,349
Final 5 Years:
Interest Earned in 15 Years: ₹20,48,297
Total Amount after 15 Years: ₹30,48,297
Thus, after a total investment period of 15 years, your total return will be ₹30,48,297, effectively tripling your initial investment of ₹10,00,000.
Important Rules for Extension
1-Year FD: Can be extended within 6 months from the maturity date.
2-Year FD: Must be extended within 12 months of maturity.
3 and 5-Year FDs: The extension request must be made within 18 months of the maturity date.
You can also request an account extension when opening the account.
The interest rate applicable on the maturity date will continue to apply during the extended period.
