3 Post Office Schemes With 5-Year Lock-In Period That Offer Guaranteed Returns
In the midst of the unpredictable stock market fluctuations, many individuals prefer to invest in safer options rather than the risky equity market. The post office provides excellent investment opportunities for such individuals. Investing in Post Office Small Savings Schemes can yield higher returns in the long run.
In this article, we will discuss three Post Office Savings Schemes that offer guaranteed returns. These schemes are the Post Office Recurring Deposit Account, Post Office Time Deposit Account (POTD), and Post Office National Savings Certificate (NSC). Except for the Time Deposit, these schemes come with a lock-in period of five years. Investing in these post office savings schemes offers numerous benefits.
One of the main advantages is the assurance of guaranteed returns, backed by the reliability of the Post Office. Additionally, two of these schemes provide the benefit of tax deductions.
- Post Office Recurring Deposit Account (RD) The Post Office Recurring Deposit Account is a safe and secure option that offers guaranteed returns over a five-year period. This scheme provides an interest rate of 5.8% on RD, compounded quarterly. You can start investing in this scheme with a minimum monthly deposit of Rs 100 or any amount in multiples of Rs 10. There is no maximum limit for investment in this scheme.
- Post Office Time Deposit Account (POTD) The Post Office Time Deposit Account, also known as a Fixed Deposit (FD), allows you to make deposits for one, two, three, or five years. For deposits of one, two, and three years, the scheme offers an interest rate of 5.5%. However, if you are seeking higher returns, investing in the Time Deposit for five years is recommended, as it offers an interest rate of up to 6.7%. Moreover, you can benefit from income tax exemption under section 80C of the Income Tax Act, 1961. The account can be opened with a minimum deposit of Rs 1,000, and there is no maximum limit for investment.
Interest rates for Time Deposit:
- 1-year account: 5.50%
- 2-year account: 5.50%
- 3-year account: 5.5%
- 5-year account: 6.7%
- Post Office National Savings Certificate (NSC) The Post Office National Savings Certificate (NSC) scheme comes with a lock-in period of five years. This scheme offers a promising interest rate of up to 6.8% on a five-year tenure. You can invest a minimum of Rs 1,000 and in multiples of Rs 100. There is no maximum limit for deposit. Withdrawal of funds is only permitted after the completion of the five-year lock-in period, although there are certain conditions under which premature withdrawal is possible. Deposits made under this scheme qualify for deduction under section 80C of the Income Tax Act.
Investing in these Post Office schemes provides a secure avenue for individuals seeking guaranteed returns. The lock-in period ensures that the funds remain invested for a fixed duration, allowing them to grow over time. Additionally, the tax benefits associated with some of these schemes make them even more attractive. Consider these options for a reliable and rewarding investment strategy.
