In this scheme, depositors get bumper interest up to 7.5 percent. Apart from this, it also helps in saving tax. Broadly speaking, if you deposit Rs 2 lakh lump sum in this scheme, then you will get around Rs 90 thousand as interest. Apart from this, the principal amount of 2 lakh will also be returned on completion of time. Let us give complete information about this scheme.

Maturity is of 1-5 years

According to the information available on India Post’s website, Post Office Time Deposit Account can be opened for 4 different tenures. Interest rate is 6.8% for 1 year, 6.9% for 2 years, 7% for 3 years and 7.5% for 5 years. Interest is paid annually and calculated quarterly. A minimum investment of Rs 1000 can be made. Beyond that, investments can be made in multiples of Rs.100.

90 thousand will be given only as interest

According to the Post Office Time Deposit Calculator, if an investor deposits Rs 2 lakh in this scheme for 5 years, then he will get a total of Rs 89990 as interest. On completion of the period of five years, he will also get back the principal amount of Rs 2 lakh.

Tax benefit is available on time deposit of 5 years

If the Post Office Time Deposit account is opened for 5 years, then tax benefit is also available on it. Deduction can be availed under section 80C on the investment amount. Talking about other features of this scheme, it can be opened single or joint. Pre-mature closure is possible only after at least 6 months if the investment is made once.

Investors can open any number of accounts

If an investor wants to extend the Post Office Time Deposit account, then after maturity, he can extend it for the same time period. An investor can open any number of accounts in his name. One important thing is that even if you do not withdraw the interest amount received on annual basis, it will remain in the account like dead money. There is no separate interest on this.

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In this scheme, depositors get bumper interest up to 7.5 percent. Apart from this, it also helps in saving tax. Broadly speaking, if you deposit Rs 2 lakh lump sum in this scheme, then you will get around Rs 90 thousand as interest. Apart from this, the principal amount of 2 lakh will also be returned on completion of time. Let us give complete information about this scheme.

Maturity is of 1-5 years

According to the information available on India Post’s website, Post Office Time Deposit Account can be opened for 4 different tenures. Interest rate is 6.8% for 1 year, 6.9% for 2 years, 7% for 3 years and 7.5% for 5 years. Interest is paid annually and calculated quarterly. A minimum investment of Rs 1000 can be made. Beyond that, investments can be made in multiples of Rs.100.

90 thousand will be given only as interest

According to the Post Office Time Deposit Calculator, if an investor deposits Rs 2 lakh in this scheme for 5 years, then he will get a total of Rs 89990 as interest. On completion of the period of five years, he will also get back the principal amount of Rs 2 lakh.

Tax benefit is available on time deposit of 5 years

If the Post Office Time Deposit account is opened for 5 years, then tax benefit is also available on it. Deduction can be availed under section 80C on the investment amount. Talking about other features of this scheme, it can be opened single or joint. Pre-mature closure is possible only after at least 6 months if the investment is made once.

Investors can open any number of accounts

If an investor wants to extend the Post Office Time Deposit account, then after maturity, he can extend it for the same time period. An investor can open any number of accounts in his name. One important thing is that even if you do not withdraw the interest amount received on annual basis, it will remain in the account like dead money. There is no separate interest on this.

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As the new year 2023 begins, it is the right time for senior citizens to plan their investments and choose tax saving FDs to make the most of the rising interest rates on deposits. Lending may become more expensive in the coming times and banks may want to entice investors to keep their money with them to increase their cash flows.

Starting a tax-saving FD teaches a very important lesson, that is to save more. Saving a penny is earning money. This is a general rule, and it works well for senior citizens as well. Here are some of the key features of the tax saving senior citizen FD.

1. Fixed Returns: Many financial instruments show volatility when it comes to returns. Moreover, investors have to wait for an average of three to five years for their investments to grow. On the other hand, FD gives you fixed returns risk free. There is no risk to your money, and you get assured returns.
2. Flexibility in tenure: FD comes with flexibility of tenure and amount. You can choose any tenure and amount you want to invest. However, for tax saving FDs, you must have a lock-in period of at least five years. Longer tenure helps you deposit more amount with interest. Many people opt for longer tenure and higher maturity amount for tax saving.
3. Zero Maintenance Cost: Unlike mutual funds and stocks, when you invest your money in FDs you don’t really need to track the market and ups and downs. This is a one time activity, and you can get your maturity once your FD tenure is over. There is no cost to anything. You put a fixed amount in the FD account, and you get a lump sum when your FD matures.
4. Liquidity: Despite the lock-in period in case of tax saving senior citizens FD, you can still liquidate your investment if you need funds due to an emergency. The lock-in terms and conditions are not very stringent as compared to other financial instruments. However, you must check with the bank for deductions and penalties when you opt for early withdrawal.
5. Safety: Your money remains completely safe in the FD account until your bank defaults. Despite this, you are eligible to claim a maximum of Rs 5 lakh from the Deposit Insurance and Credit Guarantee Corporation (DICGC) with effect from 4 February 2020. This makes FD a very safe investment option for senior citizens.
6. Tax Saving: Tax deduction of up to Rs 1.5 lakh is allowed under Section 80C, when you invest in a tax-saver FD with a minimum lock-in period of five years.

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8.5 percent interest for general public

According to the information available on the bank’s website, the minimum interest rate on fixed deposits for the general public is 4.50 per cent and the maximum interest rate is 8.50 per cent. At the same time, senior citizens will get an additional benefit of 50 basis points in the interest rate. For them, the minimum interest rate has been made 4.50 percent and the maximum interest rate has been made 9 percent. The new rate is applicable from today itself.

8.5% interest for 181 days

According to the information available on the bank’s website, the interest rate on FD for 7-14 days is 4.5 per cent, 4.75 per cent for 15-45 days, 5.25 per cent for 46-60 days, 5.50 per cent for 61-90 days, 91- 5.75 per cent for 180 days, has been increased to 8.5 per cent for 181 days.

8.5% interest for 501 days

6.75 per cent for 182 days to 364 days, 7.35 per cent for 365 days to 500 days and 8.50 per cent for 501 days. 502 days to 18 months 7.35%, 18 months to 2 years 7.40%, more than 2 years and up to 3 years 7.65%, more than 3 years and up to 5 years 7.65% and more than 5 years up to 10 years 7% Returns are being given.

Talking about senior citizens, the minimum interest rate is 4.5 percent and the maximum interest rate is 9 percent. The interest rate has been reduced to 9 per cent for 181 days and 9 per cent for 501 days fixed deposits.

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