Many people want to save a significant portion of their earnings based on their financial capabilities. Numerous saving schemes are available, but the primary concern is security and the potential for good returns on hard-earned money.
Public sector organizations offer attractive schemes for individuals seeking security and decent returns, with the post office being a standout option.
The post office time deposit scheme is considered one of the best. It provides better returns compared to bank fixed deposits. For instance, with an investment of Rs. 5 lakhs, a return of Rs. 15 lakhs can be obtained through this scheme.
Regarding the Post Office Time Deposit Scheme, let’s assess the potential profits from an investment.
For example, an initial investment of Rs. 5 lakhs with an interest rate of 7.5 percent would yield a maturity amount of Rs. 7,24,974 after five years. If the amount is reinvested for another five years without any withdrawals, the total amount would grow to Rs. 10,51,175.
After the initial five years, dividing the income into two parts and reinvesting is advisable. This strategy would generate Rs. 10,24,149 from the interest alone, added to the initial investment of Rs. 5 lakhs, resulting in a total of Rs. 15,24,149.
It’s important to note that this scheme’s investment can be extended only twice. Like banks, post offices offer various FD options with different tenures.
Interest rates vary based on the duration of the deposit, with the annual interest rates being:
- 6.9 percent for a one-year deposit.
- 7.0 percent for a two-year FD.
- 7.1 percent for a three-year FD.
- 7.5 percent for a five-year TD.
The interest earned depends on the duration of the deposit.