Post Office Special Scheme: One of the main worries that many people have while investing is the guarantee of profits. For this reason, a lot of investors choose investment plans that have safe returns and little market risk. One dependable choice that satisfies these requirements is the Post Office Time Deposit Scheme, or Post Office FD.
Understanding the Post Office Special Scheme
With set interest rates, investors may make both short-term and long-term investments through the Post Office Time Deposit Scheme. Each of the four investment periods—one, two, three, or five years—offers a distinct yearly interest rate.
- 1-year FD: 6.9%
- 2-year FD: 7.0%
- 3-year FD: 7.1%
- 5-year FD: 7.5%
These rates provide a predictable and steady return on investment, making it easier to plan for the future.
How to Double Your Money with Post Office FD
The Post Office Special Scheme offers an exceptional feature whereby you may double your investment by choosing a 5-year fixed-rate bond and then extending it for an additional 5-year period. This is how it operates:
- Initial 5-year Investment: Your maturity amount will be Rs 14,49,948 if you invest Rs 10,000,000 at a 7.5% interest rate and earn Rs 4,49,948 in interest over the course of five years.
- 5-year Extension: Your total maturity amount will be Rs 21,02,349 if you want to prolong your fixed-rate deposit (FD) by five more years. The interest earned during that time would be Rs 11,02,349.
This method effectively doubles your money with the security of a fixed interest rate and minimal market risk.
Extension and Tax Benefits
The Post Office FD scheme offers flexible extension options:
- 1-year FD: Can be extended within 6 months from the maturity date.
- 2-year FD: Can be extended within 12 months from the maturity date.
- 3-year and 5-year FD: Can be extended within 18 months from the maturity date.
Further financial advantages arise from the fact that investments made in a 5-year Post Office Time Deposit are eligible for tax exemption under Section 80C of the Income Tax Act, 1961.
Early Withdrawal and Penalties
The Post Office FD scheme permits early withdrawal if necessary, even though it is intended for set durations. It’s crucial to remember that early withdrawal may result in a penalty, so you should only think about this choice if you have an immediate financial need.
Disclaimer: (This information is provided solely for informational purposes. It is important to note that investing in the market or a business idea involves market risks. Before investing money as an investor/ owner/ partner, always consult an expert. DNP News Network Private Limited or it’s writer never advises to invest money on stocks or any specific business idea. We will not be liable for any financial losses.)
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