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Post Office Time Deposit Scheme: The post office runs several schemes of small savings schemes. If an investor wants to invest in fixed income schemes then India Post Time Deposit Scheme is a great option
, It is just like a fixed deposit in a bank. However, money can be deposited in it only for four different tenures. POTD ie Post Office Time Deposit can be opened for 1 year, 2 years, 3 years and 5 years. Interest is calculated on a quarterly basis, but paid annually.
Get up to 7.5 percent interest
According to the information available on India Post’s website, interest rate has been changed from April 1. At present, 6.8 per cent interest is available on 1-year fixed deposit, 6.9 per cent on 2-year period, 7 per cent interest. per cent on a period of 3 years and 7.5 per cent on a period of 5 years. A minimum investment of Rs 1000 can be made. There is no limit on the maximum investment.
2.25 lakh interest on 5 lakh
Tax deduction under section 80C of the Income Tax Act is also available on 5 year fixed deposits. According to the post office calculator, if an investor deposits Rs 5 lakh in time deposit scheme for 5 years, then he will get a total of Rs 2 lakh 24 thousand 974 as interest. The annual average return, known as CAGR, is 7.71 per cent. On completion of five years, you will also get back the principal amount of Rs 5 lakh.
Why invest in Post Office Time Deposit?
1>> Post Office Time Deposit Account is just like Bank FD. In this, the interest rate is revised on a quarterly basis. It can be opened for 1, 2, 3 and 5 years.
2>> It gets a minimum interest of 6.8 percent and a maximum of 7.5 percent. This is higher than the average returns of banks.
3>> Revision of interest is done on Paytm quarterly basis. Bank FD rates largely depend on the repo rate of the Reserve Bank. The Reserve Bank decides on the repo rate every two months.
4>> Pre-mature closure of post office time deposit account can also be done.
5>> The post office time deposit account can also be extended within a specified period. Apart from this, emergency fund can also be arranged by mortgaging it at the time of need.
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