When considering investments, many of us look for options with guaranteed returns and minimal market risk. One such option is the Post Office Time Deposit (TD) Scheme. This scheme offers fixed interest rates across various tenures, and with careful planning, it can significantly increase your initial investment.
Understanding the Fixed Deposit Interest Rates
The Post Office FD Scheme provides different interest rates based on the investment period:
- 1-Year FD: 6.9%
- 2-Year FD: 7.0%
- 3-Year FD: 7.1%
- 5-Year FD: 7.5%
For those looking to maximize returns, the 5-year FD is particularly attractive due to its higher interest rate.
How to Maximize Your Investment
To effectively double your investment, you need to invest in the 5-year FD and then extend it for an additional five years. Here’s how it works:
- Initial 5-Year Investment: Invest Rs 5 lakh in the 5-year FD at an interest rate of 7.5%. Over the first five years, your investment will grow to Rs 7,24,974.
- Extension for Another 5 Years: If you extend this FD for another five years, you will earn an additional interest of Rs 5,51,175, bringing your total maturity amount to Rs 10,51,175.
Understanding FD Extension Rules
The FD extension rules are straightforward:
- 1-Year FD: Can be extended within six months of maturity.
- 2-Year FD: Can be extended within 12 months of maturity.
- 3- and 5-Year FDs: Can be extended within 18 months of maturity.
You can also opt for the extension when opening the account by informing the post office during the application process.
Investment Returns: A Detailed Breakdown
Here’s how different investment amounts grow in a 5-year post office FD:
| FD Amount (in Rs) | Interest Earned (in Rs) | Maturity Amount (in Rs) |
| 1,00,000 | 44,995 | 1,44,995 |
| 2,00,000 | 89,990 | 2,89,990 |
| 3,00,000 | 1,34,984 | 4,34,984 |
| 4,00,000 | 1,79,979 | 5,79,979 |
| 5,00,000 | 2,24,974 | 7,24,974 |
| 6,00,000 | 2,69,969 | 8,69,969 |
| 7,00,000 | 3,14,964 | 10,14,964 |
| 8,00,000 | 3,59,958 | 11,59,958 |
| 9,00,000 | 4,04,953 | 13,04,953 |
| 10,00,000 | 4,49,948 | 14,49,948 |
By investing Rs 5 lakh in a 5-year Post Office FD and extending it for an additional five years, you can more than double your investment. This scheme not only provides guaranteed returns but also offers tax benefits of up to Rs 1.50 lakh. Whether you’re a cautious investor or looking to grow your savings steadily, the Post Office FD Scheme is a reliable choice.
