Earn Rs 3.8 lakh interest on your investment! How you can make money in this post office FD (Fixed Deposit) account

Post Office FD: Post Office time deposit small savings schemes offer various investment options to investors, who have low risk appetite. Post Office FD (Fixed Deposit) is one such attractive investment option for an earning individual. As per the tax and investment experts, the Post Office FD investment is safer than Bank FD because Post Office FD is government-backed small savings scheme. In post office FD, central government is a guarantor but not in the case of Bank FD.

Elaborating upon the details of Post Office Fixed Deposit scheme, Manikaran Singhal, a SEBI registered tax and investment expert said, "The Post Office Time Deposit Account (TD) or Post Office Fixed Deposit (FD) is an investment opportunity that can be availed under the Post Office Small Saving schemes. It has four types of offers that vary on the maturity of the scheme — one year, two year, three year and five year. In this post office scheme, an investor can invest once in one account but he or she can open more than one account in Post Office Deposit Scheme." 

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Singhal said that Post Office Deposit Scheme having 1,2 and 3 year maturity is giving 5.5 per cent annual return these days while the 5 years maturity scheme is giving 6.7 per cent annual return. Singhal said that there is no limit on maximum amount to be invested in Post Office Term Deposit but the minimum amount that one can invest in this small saving scheme is Rs 1,000 and the money invested in this Post Office Scheme has to be in the multiple of Rs 100. 

On whether one can prematurely close the post office fixed deposit account, Singhal said, "An investor can prematurely close the term deposit account. However, to do so the account should be active for a minimum period of 6 months."

On how to open Post Office Term Deposit account, Jitendra Solanbki, a SEBI registered tax and investment expert said, "Post Office Fixed Deposit account can be opened by cash or Cheque and in case of Cheque the date of realization of cheque in Govt. account shall be date of opening of account. Interest shall be payable annually, no additional interest shall be payable on the amount of interest that has become due for payment but not withdrawn by the account holder."

On how one can earn up to Rs 3.8 lakh interest in five years in this post office scheme, Solanki said, "If an investor invests Rs 10 lakh in Post Office Term Deposit Scheme for five years, his or her returns in five years at 6.7 per cent annual return would be Rs 13.80 lakh, which means the interest earned during the five years is Rs 3.8 lakh." Solanki added that such investments are suitable for senior citizens who have retired.