In today’s time, when there are many investment options, the Post Office Fixed Deposit (FD) emerges as a safe and reliable alternative. This scheme is suitable for those who want to earn good interest while keeping their money safe. The post office FD scheme has the support of the government, making it a safe option for investors.
In this article, we will give complete information about the post office FD scheme and understand how you can get a return of about ₹ 1.50 lakh in 5 years by investing ₹ 1 lakh. Also, the rules of this scheme, interest rates and benefits will also be discussed.
Post Office FD Scheme overview
Post Office Fixed Deposit Scheme is a government scheme that provides guaranteed returns. This scheme is ideal for those who want to increase their money while avoiding risk. A brief description of this plan below is given:
| Parameter | Description |
| Interest Rate | 6.90% to 7.50% per year |
| Tenure | 1 year, 2 years, 3 years, and 5 years |
| Minimum deposit | ₹ 1,000 |
| Maximum deposit | No limit |
| Tax Benefit | Under Section 80C on only 5-year FD |
| Interest calculation | Quarterly Compounding |
| Premature withdrawal | Permission after 6 months |
Interest rates on post office FD
Post office FD interest rates vary according to tenure. The interest rates applied from January to March 2025 are as follows:
| Tenure | Interest Rate |
| 1 year | 6.90% |
| 2 years | 7.00% |
| 3 years | 7.10% |
| 5 year | 7.50% |
Calculation of return for ₹ 1 lakh in post office FD
If you invest ₹ 1 lakh in Post Office FD, then you will get the following returns on various term:
- 1 year FD (6.90%)
- Principal: ₹ 1,00,000
- Interest: ₹ 7,081
- Total amount: ₹ 1,07,081
- 2 year old FD (7.00%)
- Principal: ₹ 1,00,000
- Interest: ₹ 14,888
- Total amount: ₹ 1,14,888
- 3 year old FD (7.10%)
- Principal: ₹ 1,00,000
- Interest: ₹ 23,508
- Total amount: ₹ 1,23,508
- 5 year old FD (7.50%)
- Principal: ₹ 1,00,000
- Interest: ₹ 44,995
- Total amount: ₹ 1,44,995
Note here that in a period of 5 years your investment becomes about one and a half times.
Benefits of Post Office FD
Post Office Fixed Deposit Scheme provides many benefits:
- Safe investment: The scheme is supported by the Government of India.
- Guaranteed Return: You get a definite interest in it.
- Flexibility: You can open it for a period of 1 to 5 years.
- Tax Benefits: A five -year FD gets tax exemption under Section 80C.
- Premature withdrawal: You can remove it after six months if needed.
Post Office FD vs Bank FD
Both post office and bank provide fixed deposit schemes. Below is comparative details of these two:
| Criteria | Post Office FD | Bank fd |
| Security | Government supported | DICGC insured (up to ₹ 5 lakh) |
| Interest rates | Most high | The bank keeps changing |
| tax benefits | Only 5-year-old FD | Tax saving available on FD |
| resilience | Limited option | More flexible options |
Post office FD opening process
The process of opening a fixed deposit account in the post office is simple and straight:
- Go to your nearest post office.
- Fill the account opening form.
- Submit the required documents (identification proof and address proof).
- Deposit the investment amount.
- You will get a certificate that will confirm your FD.
Tax terms and conditions
Tax rules on interest on post office FD are as follows:
- TDS will be deducted if the annual interest exceeds ₹ 40,000.
- Senior citizens get this limit up to ₹ 50,000.
- Five -year -old FD gets tax exemption under Section 80C.
Disclaimer: Is this claim correct?
The Post Office Fixed Deposit Scheme is actually a safe and guaranteed return scheme. However, “deposit ₹ 1 lakh and get ₹ 1.50 lakh”. In reality, you can earn an interest of about ₹ 44,995 in five years i.e. the total amount will be around ₹ 1.45 lakh. Therefore, it is necessary to get the right information before any investment.
