Investment options safe and high-yielding are sought? The Post Office Term Deposit (TD) Account can be an option offering you high returns with an even 7.0% interest rate and government-backed security. Put in ₹20,000, and you will be able to earn a neat interest of ₹2,977.64 at the end of 12 months to keep growing your savings further.
This scheme with a minimum requirement of only ₹1,000 makes it feasible for both small and big investors. Besides, the 5-year TD option would be a great investment toward tax savings under Section 80C.
What is the Post Office TD Scheme?
The Post Office Term Deposit (TD) Scheme is a low-risk government-backed investment that beats most banks’ term deposits (FDs) in interest rates. It currently offers 7.0% on deposits, which is impressive for risk-averse investors.
How Much Interest Will You Earn on ₹20,000?
Let’s see how the returns stack up:
- Annual Interest: ₹20,000 × 7.0% = ₹1,400
- Monthly Interest: ₹1,400 ÷ 12 = ₹116.67
- Quarterly Interest: ₹1,400 ÷ 4 = ₹350
At the end of one year, depending on the frequency of choosing, one will get an interest earning of ₹2977.64.
How to Open a Post Office TD Account?
It is very easy and follows the steps below to open a Post Office TD Account.
- Visit Your Nearest Post Office – Fill out the TD account application form.
- Submit Required Documents – Aadhaar Card, PAN Card, and identity proof.
- Deposit the Amount – Minimum amount is ₹1,000 (no maximum).
- Select Tenure – 1, 2, 3, or 5 years.
- Choose Interest Payout – monthly, quarterly, or annual.
Major Advantages of Post Office TD Account
- Government-Backed Security – Your investment is 100% safe.
- Higher Interest Rates – 7.0% returns, better than many bank FDs.
- Tax Savings – 5-Year TD qualifies for Section 80C deductions.
- Flexible Investment – Start with just ₹1,000 and choose your tenure.
Frequently Asked Questions (FAQs)
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Q1: For how many years can a person open a Post Office TD Account?
You could open a TD for a duration of 1, 2, 3, or 5 years
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Q2: Changes in the interest rate, aren’t they?
Yes, the government revises rates periodically but remains stable and competitive.
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Q3: Is the interest taxable?
The 5-year TD avails tax benefits under Section 80C.
For other durations, tax will be applicable as per the income slab.