Post Office Scheme: Earn up to Rs 3.8 lakh interest through this fixed deposit in just 5 years; check simple calculation

Post Office Deposit Scheme: India Post Office offers various investment options under the government backed small savings schemes. Post Office Fixed Deposit (FD) is one of the favorite investment options for earning individuals who have extremely low risk appetite. According to tax and investment experts, the Post Office Fixed Deposit is safer than even a Bank FD as it is guaranteed by the government.

Speaking on the 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 Savings schemes. It has four types of offers that vary on the maturity of the scheme — one year, two years, three years and five years. You can invest only once in one account but there is no bar on opening 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 post office fixed deposit account can be prematurely closed, 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 get these benefits by opening 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annually, no additional interest shall be payable on the amount of interest that has become due for payment but not withdrawn by the account holder."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 interest for 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.