Banks and financial institutions surely do provide a variety of investment schemes that appeal to different sections of the societal hierarchy. But if you are looking for best interest rates, post office schemes are also a good option. Post offices also allow you to invest your money in their schemes. If you want a safe deposit with good returns, the Time Deposit Scheme run by the post office is a good option. In layman’s language, it is also called Post Office FD due to its similarity with the bank’s fixed deposit schemes. There are many periods for investing money. Besides, you also get interest ranging from 6.9 percent to 7.5 percent.
The investor has the option to make both short-term and long-term investments using the time deposit plan. You can deposit money into this scheme for one, two, three, or five years. Any citizen of India may register for the Post Office Time Deposit Scheme. In addition, three adults are able to open a joint account. Parents may register a time deposit account in their children’s name who are older than ten. A minimum of Rs 1,000 can be invested.
If you invest money in a post office time deposit for one year, you will get 6.9 percent interest. If you invest for two years, you will get 7 percent interest. On investing money for three years, 7.1 percent interest is given to the investor and 7.5 percent interest is given on a time deposit of five years.
The amount invested in a time deposit account with a tenure of 5 years in the post office also gets the benefit of tax exemption under Section 80C of the Income Tax Act, 1961. Tax benefits are not available on deposits with tenure shorter than 5 years. Money can be withdrawn even before the maturity of the time deposit, but there is a penalty fee that will be charged.
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