Post Office Scheme:
For those looking to invest a lump sum, the post office offers an opportunity to potentially triple your investment. Discover how investing ₹500,000 can turn into over ₹1,500,000.
When a child is born, parents often plan financially to ensure their child has the best possible future. This planning might include investments in schemes like PPF or Sukanya, or depositing a lump sum to meet future needs.
If you're considering a lump sum investment, Post Office Term Deposits (FDs) could be a wise choice. A 5-year FD at the post office currently offers better interest rates than banks. Through this scheme, your investment can more than triple; ₹500,000 can grow to over ₹1,500,000. Here’s how:
How ₹500,000 Becomes ₹1,500,000
First, invest ₹500,000 in a 5-year post office FD at 7.5% interest. After 5 years, your investment will grow to ₹724,974. Instead of withdrawing this amount, reinvest it for another 5 years. Over 10 years, your investment will yield ₹551,175 in interest, bringing the total to ₹1,051,175.
To achieve the ₹1,500,000 target, reinvest this amount once more for an additional 5 years. After 15 years, you will earn ₹1,024,149 in interest on the original ₹500,000 investment, totaling ₹1,524,149. This sum can support your child's needs, especially during their teenage years.
Extension Rules
To reach ₹1,500,000, you need to extend the FD twice. Understand these rules:
- A 1-year FD can be extended within 6 months post-maturity.
- A 2-year FD within 12 months.
- A 3 or 5-year FD within 18 months.
You can also request an extension at account opening. The interest rate applicable on the maturity date will apply to the extended period.
Current Post Office TD Interest Rates
The post office offers various FD tenures, each with different interest rates:
- 1-year account: 6.9% annual interest
- 2-year account: 7.0% annual interest
- 3-year account: 7.1% annual interest
- 5-year account: 7.5% annual interest
