Post Office’s Time Deposit Scheme: By investing in this scheme, you can get more interest than the FD of banks
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The Reserve Bank of India (RBI) has cut the repo rate for the third consecutive time in the month of June. With this cut, the repo rate has come down by a huge 1%. After the reduction in the repo rate, banks have reduced the interest on loans and FDs .
On one hand, this has reduced the EMI of the loan, on the other hand, the return on FD has also decreased. Senior citizens have suffered the most due to the reduction in interest on FD. In such a situation, if you are also troubled by the low interest on FD, then there is no need to take tension. We are telling you about a great saving scheme of Post Office. The name of that scheme is Post Office Time Deposit (TD). By investing in this scheme, you can get more interest than bank FD. Let’s know about this special scheme.
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What is Post Office Time Deposit (TD) Scheme?
This is a fixed deposit scheme run by the post office. You can invest in it for 1,2,3 and 5 years. This scheme is backed by the government, so it is completely safe and reliable.
Interest Rates on Post Office Time Deposit Scheme
| Duration | interest rate |
| 1 year | 6.9% per annum |
| 2 years | 7.0% per annum |
| 3 years | 7.1% per annum |
| 5 year | 7.5% p.a. (Tax exemption under 80C) |
Who can invest?
Any adult citizen of the country can invest in this scheme. At the same time, 3 adults can invest in it together by opening a joint account. Parents can invest in this investment scheme in the name of their children.
How much can you start investing with?
You can start investing in this saving scheme with ₹1000. You can increase the amount as per your wish in multiples. There is no maximum investment limit. Interest is paid annually. Investing in 5-year TD is eligible for tax exemption under Section 80C of the Income Tax Act.
The account can be extended within the prescribed time from the date of maturity:
- 1 year TD: in 6 months
- 2 year TD: in 12 months
- TD for 3 and 5 years: in 18 months
Extension can be requested at the time of opening the account itself. The application form and passbook for extension has to be submitted to the concerned post office. The original interest rate which was applicable on the day of maturity will be applicable for the extension period.
Premature withdrawal of money
Withdrawal cannot be made before 6 months from the date of opening the account. If the account is closed between 6 months to 1 year, the Post Office Savings Account interest rate is applicable.
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