After the Reserve Bank of India (RBI) cut the repo rate by 1.00 percent this year, almost all the big banks of the country have reduced the interest rates on Fixed Deposit (FD). Due to this step of banks, the returns given to investors on FD have reduced. However, the good news is that it has not had any impact on the Post Office Fixed Deposit i.e. Time Deposit (TD) scheme. Here, customers are still getting excellent interest, which is why people are now turning to post offices instead of banks in search of safe investment and higher profits.
Strong returns of up to 7.5% are available on investment for one to five years, you can start with a minimum of Rs 1000.
The post office gives its customers the option to open Time Deposit (TD) for tenures of 1 year, 2 years, 3 years and 5 years. According to the current interest rates, the highest interest being given is 6.9% on 1 year deposit, 7.0% on 2 year deposit, 7.1% on 3 year deposit and the highest interest rate of 7.5% on 5 year deposit. The biggest feature of this government scheme is that investment in it can be started with just Rs 1000, while there is no limit on maximum investment, that is, you can deposit as much money as you want.
If you deposit Rs 1 lakh in your wife’s name, you will earn around Rs 15 thousand from interest in two years.
The benefits available in the post office scheme can be easily understood with an example. If you invest a lump sum of Rs 1,00,000 in a 2-year FD in the post office in the name of your wife or a family member, your maturity amount after 24 months will be Rs 1,14,888 at the current 7.0% interest rate. In this, your principal amount of Rs 1,00,000 will remain safe and you will earn additional Rs 14,888 as interest. This scheme is becoming quite popular due to low risk and assured returns.
Profit on FD is continuously decreasing in banks, while safe investment in post office is giving more profit.
Investors believe that money is safer in post office schemes as compared to banks and currently the returns are also better, hence there is no question of taking risk here. On one hand, while FD rates in banks are continuously falling and customers’ profits are decreasing, on the other hand the Post Office has not made any cut in its interest rates yet. However, all eyes are now on whether the post office will reduce the interest rates in the coming time or will continue to give bumper benefits to the customers.
