The special thing is that if you invest for the right period, you can earn more than Rs 5 lakh from interest alone.
Government guarantee, zero risk on investment
All small savings schemes of the post office are guaranteed by the Government of India. Therefore, market fluctuations have no effect on your investment. This is the reason why this scheme is very popular among those who want assured returns without risk.
How much interest is available on Post Office Time Deposit Scheme?
In Post Office Time Deposit Scheme, different interest rates are available according to the period of investment.
| investment period | interest rate |
| 1 year | 6.90% |
| 2 years | 7.00% |
| 3 years | 7.10% |
| 5 year | 7.50% |
The highest annual interest of 7.50% is available on time deposits of 5 years.
You can start investing from ₹ 1,000
Investment in this scheme can be started with just ₹ 1,000. Other than this
- Facility of both single and joint account
- No maximum investment limit
- You can open an account in any post office in the country.
You will also get the benefit of tax exemption
If you invest in a 5-year time deposit scheme, you can also get the benefit of tax exemption under Section 80C of the Income Tax Act.
How to get ₹5.17 lakh just from interest?
If an investor invests a lump sum amount of ₹ 11.5 lakh for 5 years at 7.50% interest, then on maturity he will get approximately ₹ 16,67,440.
- total investment: ₹11,50,000
- Maturity Amount: ₹16,67,440
- Earning only from interest: ₹5,17,440
That means, without any risk, one can earn more than Rs 5 lakh just from interest.
For whom is this scheme?
This scheme is a better option especially for those who
- want safe investment
- prefer fixed returns
- Banks are looking for alternative to FD
- Want to invest while saving tax
- Can invest lump sum amount for long term
