Post Office Fixed Deposit Scheme: Know the interest rates and lock-in period

Banks and financial institutions do offer various investment schemes that appeal to different sections of society. But if you’re looking for the best rates, post office plans are also a good option. The Post Office also allows you to invest your money into their schemes. If you want safe deposits with good returns, fixed deposit schemes run by the Post Office are a good option. Colloquially, it is also known as ‘Post Office FD’ due to its resemblance to a bank’s fixed deposit scheme. There are many time periods for investing money. Additionally, you can earn 6.9% to 7.5% interest.

Investors can choose to invest both short-term and long-term using fixed deposit schemes. You can keep your money in the plan for one, two, three or five years. Any Indian citizen can register for the Post Office Fixed Deposit Scheme. Additionally, three adults can open a joint account. Parents can open time deposit accounts in the names of their children over ten years old. A minimum investment of Rs 1,000 can be made.

If you invest your money in a post office fixed deposit for a year, you will earn 6.9% interest. If you invest for two years, you will earn 7% interest. Investors can earn 7.1% interest on a three-year term deposit and 7.5% on a five-year term deposit.

Tax exemption is also available on the amount invested in a post office fixed deposit account with a tenure of 5 years under Section 80C of the Income Tax Act, 1961. Deposits with a maturity period of less than 5 years do not enjoy tax benefits. Funds can be withdrawn even before maturity of the fixed deposit, subject to penalty charges.