All major banks in India offer customers the option of opening a FD with a good rate of interest. If you are looking for another Rtahn bank FD, you can check the post office FD. Investors have the opportunity to invest in the post office and earn a good return, perhaps better than some bank FDs.
You have the option of depositing your money in Post Office Time Deposits (POTD), this is often seen as a safe option for DFs. POTD attracts a quarterly rate review. POTD is similar to a fixed bank deposit, where you save money for a set time, earning a guaranteed return over the term of the deposit. At the end of the Deposit Term, the Maturity Amount includes the principal deposited and the interest earned on it.
Depositors can choose to keep their money invested in Swiss Post term deposits for 1 to 5 years, just as they can with bank DFs. La Poste offers an interest rate of 5.5% on deposits of one to three years. The interest rate on a 5-year term account is 6.7%.
Swiss Post term deposit interest rates
The POTD is not inflation protected, implying that whenever inflation exceeds the promised interest rate, the return on the scheme is worthless. However, when inflation is lower than the promised return, a positive real rate of return is achieved.
Term Deposit at the Post Office – Other Details
Eligibility – You must be a resident Indian, preferably with a post office savings bank account. You can open the account at any main or general post office.
Deposits – A minimum of Rs. 1000 and multiples of Rs. 100 are required to open an account. There is no maximum investment amount. Interest is paid once a year and no further interest will be paid on interest that was due but not withdrawn by the account holder. The annual interest will be credited to the account holder’s savings account.
Premature account reconciliation – You cannot withdraw the deposited amount before the expiration of six months after the deposit date. The POTD account interest rate will apply if the account is closed after 6 months but before 1 year. If a TD 2/3/5 Year Account is prematurely closed after 1 year, interest will be calculated at 2% less than the TD Interest Rate for 1/2/3 Years for full years, and for partial period less than a year. , PO savings interest rates will apply.
Taxation – Deposits with a term of less than five years do not benefit from a tax advantage. The five-year deposit is eligible for a Section 80C tax deduction on the amount deposited.
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Article first published: Friday, February 25, 2022, 11:22 a.m. [IST]