Post Office Term Deposit Scheme: The 5-year FD in the Post Office Term Deposit Scheme offers an excellent interest rate. By investing Rs. 5,00,000 in this scheme, you can earn over Rs. 15,00,000. This scheme is notable for providing 3 times the return.
Every parent thinks that their children should not face difficulties in the future. For this, they start all kinds of financial planning as soon as the child is born. Some people start investing in schemes in the name of their children.
If you want to invest a lump sum, you can invest it in Post Office Term Deposit i.e. Post Office TFD scheme. Post office offers better interest rate for 5 years FD than banks. Through this scheme, the invested amount can be increased more than three times. That is, if you invest Rs.5,00,000, you can earn more than Rs.15,00,000. Let's find out how this works.
To turn 5 lakhs into 15 lakhs, you first need to invest Rs 5,00,000 in Post Office FD for 5 years. 7.5% interest will be available on 5 year FD in Post Office. In that case, if calculated at the current interest rate, the maturity amount after 5 years will be Rs 7,24,974. You do not need to withdraw this amount. Reinvest it for another 5 years.
If you invest again for 5 years, you can earn Rs. 5,51,175 as interest in 10 years. Thus the amount invested in 10 years will double. That is, it will become Rs 10,51,175 in 10 years.
This amount should be invested again for 5 years. With this, the invested amount of Rs 5 lakh will be deposited for a total of 15 years. At the time of maturity in the 15th year, the interest on the invested 5 lakhs will be Rs 10,24,149. Adding this to the principal amount of Rs 5 lakh, you will get a total of Rs 15,24,149.
It is during the teenage years that children need more money for education. In such a situation, this amount of Rs 15 lakh can be used. It is noteworthy that to get the amount of Rs 15 lakh, the Post Office FD has to be extended twice for 5 years.
The Post Office's 1 year FD can be extended within 6 months from the maturity date. The investment should be extended within 12 months of the maturity period of 2 year FD. At the same time, for extension of 3 and 5 year FDs, the post office should be informed within 18 months of the maturity period. Apart from this, you can request to extend the reinvestment after maturity at the time of opening the account.
Like banks, post offices also have options for FDs of different tenures. Different interest rates are offered for each period. Current interest rates are as follows- One year account - 6.9% annual interest Two year account - 7.0% annual interest Three year account - 7.1% annual interest Five year account - 7.5% annual interest