post office
India Post's Time Deposit (TD) scheme is a great option for investors who want fixed and stable returns without any risk. This scheme works like a bank FD and is especially popular among the middle class, senior citizens and those who like safe investments.
Interest rate and investment period
In this scheme, there is an option to invest from 1 year to 5 years. At present interest is being given in the range of 6.90% to 7.50%. The interest rate is fixed according to different tenures, so investors can choose the tenure as per their need.
How much return will you get on Rs 7 lakh?
If an investor invests Rs 7,00,000 for 5 years and the interest rate is 7.50%, then he will get interest of around Rs 3,14,964. That means the total amount on maturity will be approximately Rs 10,14,964. This entire earning is done without market risk.
Features of guaranteed return
The biggest strength of this scheme is its guaranteed returns. Unlike the stock market or mutual funds, there is no risk of fluctuations in it. This is why it is a better option for those who give priority to the security of their money.
very easy to invest
Investing in this scheme is quite easy. Any Indian citizen can open an account in his nearest post office.
- Minimum investment: Rs 1,000
- After this invest in multiples of Rs 1,000
- No limit on maximum investment
- Facility to add one or more nominees
- You can withdraw money if needed
If there is a sudden need for money, premature withdrawal facility is available after 6 months. Although there may be a slight change in the interest rate on this, but it is very useful in emergencies.
Benefits of tax and compounding
Tax exemption up to Rs 1.5 lakh is available under Section 80C on 5 year TD scheme. However, the interest received on this is fully taxable and TDS can be deducted if it exceeds the prescribed limit. In this scheme, interest is compounded on quarterly basis, which gives better returns in the long run.
If you are looking for a safe, stable and government guaranteed investment, then Post Office Time Deposit Scheme can become a strong part of your financial planning.
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