Post Office schemes are popular as they offer a fixed and risk-free return to investors. The schemes are trustworthy as the union government backs them all.
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Why Post office schemes are popular
India still has a large population who don’t want to invest in market-linked instruments considering the uncertainty around the return. Whereas, post office schemes are considered as a steady source of income, without any risk.
National Saving Time Deposit is one of the top post office schemes for risk-free investment.
Post Office Time Deposit
It is a fixed deposit scheme, which offers investment options to investors for fixed durations of 1, 2, 3, and 5 years. Investors can open an account with a minimum investment of Rs 1000 and Investment can be done in multiples of Rs 100.
Post Office Time Deposit Scheme’s Features
The scheme has no maximum limit for investment.
Any Adult can open a single or joint account for up to three adults.
A guardian can open a Time Deposit account for his/her children.
Investment tenure – Investors can invest for 1, 2, 3 and 5 years in National Savings Time Deposit.
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As per the latest data, investors would get interest rates of 6.9 per cent, 7.0 per cent, 7.1 per cent and 7.5 per cent on their investment respective to the tenure of the deposit.
Every quarter Interest rates are revised by the union government. The latest rates will remain effective till March 31.
Under the Time Deposit scheme, interest is calculated every quarter and paid annually.
Investors can avail tax benefits on their 5-year tenure investment under Section 80C of the Income Tax Act.
National Savings Time Deposit Account: Understand the math for Rs 5 lakh investment
If Rs 5 lakh is invested for one year then at a 6.9 per cent interest rate, investors will get Rs 35403 at maturity
If Rs 5 is invested for two years then at 7.0 per cent, Investors will get Rs 74441 as interest.
If an investor deposits Rs 5 lakh for three years and the interest rate is 7.1 per cent, then he will get around Rs 117,537 as interest.
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If Rs 5 lakh is invested in the scheme for five years at a 7.5 per cent interest rate, then the investors will get around Rs 224,974 as interest.
