Post Office Time Deposit: When we invest in a scheme, market-linked or non-market-linked, our first through is that will we be able to recover the amount we are investing. And if we recover, what will be the time duration.
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This is the reason a lot of investors pick investment scheme where they can get guaranteed return and have the least market risk. Post Office Time Deposit Scheme, or Post Office FD, is one such investment scheme. If offers annual interest rates of 6.9% (in 1-year FD), 7.0% (2-year FD), 7.1% (in 3-year FD) and 7.5% (in 5-year FD).
While these FDs offer a fixed interest rate, you can also double your amount in post office FD. For that you have to make a five-year FD and take extention of another five years.
Know what are FD rules for extension and how you can double your investment in a post office scheme.
Know rules of FD extension
Post Office Time Deposit Account can be extended from the date of maturity within the prescribed period.
A one-year FD can be extended within six months from the maturity date, a two-year FD within 12 months of the maturity period, and 3- and 5-year FDs within 18 months of the maturity period.
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The facility of FD extention is also available at the time of opening the account, where you can inform post office at the time of filling the application form.
The interest rate applicable to the concerned TD account on the date of maturity will be applicable on the extended period.
How Rs 5 lakh will become over Rs 10 lakh
If you invest in post office FD for 5 years, you will get interest at the rate of 7.5 per cent.
According to the post office calculator, on an investment of Rs 5,00,000, you will get interest of 2,24,974 after five years and your maturity amount will be Rs 7,24,974.
But if you extend this account for another five years, your interest rate in that period will be Rs 5,51,175 and the maturity amount will be Rs 10,51,175.
So, after 10 years, your return will be more than your investment.
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What Rs 1 lakh-Rs 10 lakh investments give you in 5-year post office FD
| FD Amount (in Rs) | Interest rate (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 |
