Post Office Savings Schemes are becoming quite popular in India these days owing to their attractive interest rates and safe returns. Just like a bank, you can also open a fixed deposits (FD) account at a post office for different tenures from one year to five years.
Post office fixed deposits, also called Post Office Time Deposits (POTD) have different interest rates for different tenures.
Recently, the government increased the interest rates of the time deposit scheme by 30 basis points. Now under this scheme, an investor is being given an interest of up to 7 per cent per annum. The most important thing is that in this scheme, the investor is given the opportunity to make both short-term and long-term investments.
In the scheme, the option of investing from 1 year to 5 years is open. If you simply deposit Rs 1 lakh in lump sum for 5 years, not only will you get good returns on maturity, but you can also claim tax exemption under section 80C of the Income Tax Act.
Any Indian citizen can open an account under the post office time deposit scheme. In fact, 3 adults together can also open a joint account. Parents can also open a time deposit account in the name of their children above 10 years of age. An account can also be opened by investing only Rs 1,000 under this scheme.
Different interest rates have been fixed for different periods of investment in the post office time deposit scheme. If an investor deposits money in this scheme for 5 years, then they will get an interest at the rate of 7 per cent per annum. On making a time deposit of three years, the investor will be given an interest at the rate of 6.9 per cent. Similarly, a 6.8 per cent interest is being given on a 2-year time deposit. The lowest interest i.e. 6.6 per cent interest is given on a one-year time deposit.
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