In this guaranteed return scheme, you get Rs 2,24,974 as interest on Rs 5,00,000 investment; know details

Post Office FD Scheme: Fixed Deposit (FD) schemes are small savings schemes that are non-market-linked and provide a guaranteed return. The scheme is run by the post office as well as several banks and non-banking finance companies (NBFCs). Post office runs it under the name of Post Office Time Deposit Account (TD). But it is popularly known as post office FD. People who don't want market risk or senior citizens who want a regular income source post-retirement often opt for a FD. In an FD, you make a one-time lump sum return, and you get the return in the form of interest from the principal. After the policy matures, one can withdraw their principal. 

Post office runs four types of FDs- 1-year, 2-year, 3-year and 5-year. The 5-year policy provides an interest rate of 7.50 per cent payable annually and calculated quarterly.

One can get an interest rate of Rs 2,24,974 in a five-year FD. Before we move to the calculation segment, we need to know what the salient features of the scheme are. 

One can open a single account, a joint account (up to 3 adults), or a guardian account on behalf of a minor.

The minimum investment in the scheme is Rs 1,000 and in the multiples of Rs 100.

There is no maximum limit to investment in the 5-year FD.

The annual interest is credited to the savings account of the account holder. 

Extension of FD policy

The FD policy's tenure can be extended further.

The 5-year FD offers an extension up to 18 months.

The tenure can be extended at the time of opening the account or after maturity.

Premature closure of FD account

While the 5-year FD account can be extended, it can also be closed prematurely.

If the FD account is closed prematurely after one year, interest shall be calculated 2  per cent less than the FD interest rate (i.e., 1/2/3 years) for completed years, and for part periods less than a year, PO Savings Interest rates will be applicable.
 

How to get Rs 2,24,974 interest

If you purchase a Rs 5 lakh, 5-year FD policy and withdraw the amount at maturity, you will get Rs 2,24,974 as interest, and your maturity amount will be Rs 7,24,974.
 

What will you get if you invest Rs 7 lakh and Rs 10 lakh in a 5-year FD?

If you invest Rs 7.50 lakh in the 5-year post FD, you get Rs 3,37,461 at maturity, and your maturity amount will be Rs 10,37,461. 

If you invest Rs 10 lakh in the 5-year post office FD, you will get an interest of Rs 4,49,948, and Rs 14,49,948 will be your maturity amount.