Post Office Time Deposit Scheme is a safe and reliable investment option, which is fully supported by the Government of India. This scheme works like a bank FD, where you deposit a lump sum and get guaranteed returns after a fixed period of time. This scheme is considered very popular for investors who want fixed interest without risk.

Main features of this scheme

In Post Office Time Deposit, investors can choose the tenure of 1 year, 2 years, 3 years and 5 years. The minimum investment amount is Rs 1000 and thereafter any amount can be deposited in multiples of Rs 1000. It also provides the facility of premature withdrawal of money, which provides relief to the investor when needed. The biggest thing is that the returns received in this are completely safe and fixed.

Why is the 5 year scheme the most special?

The 5 year post office time deposit scheme is the most talked about because it not only gives good interest but also gives the benefit of tax saving. Investing in this scheme provides tax exemption under Section 80C of the Income Tax Act. This is the reason why this scheme is very much liked among the middle class and employed people.

How much return will you get on investing Rs 7 lakh?

If you deposit Rs 7 lakh in lump sum in the 5-year time deposit scheme of the post office and the current interest rate is 7.5 percent, then after 5 years you will get about Rs 3 lakh 14 thousand 964 only as interest. That means your total amount on maturity will be approximately Rs 10 lakh 14 thousand 964. This entire return is guaranteed and is not affected by market fluctuations.

Important things to tax and interest

Although investment in 5 year Post Office Time Deposit Scheme is tax exempt under 80C, but the interest received on it is taxable. If the annual interest exceeds the prescribed limit, TDS can also be deducted. In this scheme, interest is calculated on quarterly basis and payment is made annually, due to which the benefit of compounding gives better returns in the long run.

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Who is this scheme for?

For those who want a safe investment, are planning for retirement or are looking for assured returns without risk, Post Office Time Deposit Scheme is a great option. By investing in this, you can grow your money with complete security and make a strong financial plan for the future.