Post Office FD Scheme: Doubly interest from bank, know how you will get benefit! – StudyToperC

In today’s time, everyone finds good investment options to secure and increase their money. Fixed Deposit (FD) is an option that gives people safe and fixed returns. There are two major options for FD in India – Bank FD and Post Office FD. Many people think which option is better, which gets more interest, and in which money is more secure.

Post Office FD Scheme gets government support, and interest rates are often higher than banks. In this article, we will know what the Post Office FD Scheme is, what are the benefits of investing in it, and how this bank can prove better than FD.

Nowadays there is a lot of enthusiasm among the people about the Post Office FD Scheme, because the interest rates available in it are higher than the bank FD. Also, this scheme is guaranteed by the government, which gives investors full guarantee of safety of their money.

In this article, we will know in detail how to invest in Post Office FD Scheme, what are the interest rates received in it, and what should be kept in mind. Also, we will compare between Bank FD and Post Office FD, making you easier to choose the right investment option.

What is Post Office FD Scheme? (Post Office FD Scheme Kilva Dar?)

Post Office FD Scheme, also called National Savings Time Deposit Account, is a popular investment scheme run by the Indian Post Office. In this, investors deposit their amount for a certain period and get fixed interest on it. This scheme is especially for those who want safe and guaranteed returns.

To invest in Post Office FD Scheme, you just have to start with ₹ 200, so that even small investors can easily invest in it. The scheme is available for a period of 1 year, 2 years, 3 years and 5 years.

Post Office FD Scheme Overview Table

The main advantages of Post Office FD Scheme

• Government guarantee: Your money is completely safe in Post Office FD Scheme as it has the support of the Government of India.
• High interest rate: Post Office FD usually gets higher interest rate than bank FD.
• Minimum investment: Investment can be started from just ₹ 200, so that small investors can also participate in it.
• Tax Benefits: There is a tax exemption under Section 80C on 5 -year FD.
• Simple process: Investment process is very easy, and now online facility is also available.
• Additional benefits to senior citizens: Senior citizens get some additional interest rate benefits.
• Premature withdrawal: FD can be broken after 6 months (with certain conditions).

Comparison in Bank FD and Post Office FD (Bank FD vs Post Office FD Comparison)

How to invest in Post Office FD Scheme?

• Go to the nearest post office: You can open FD account by going to your nearest post office.
• Online application: Now the facility of opening online FD is also available in many post offices.
• Necessary documents: identity card (Aadhaar card, PAN card), address proof, passport size photo.
• Deposit minimum amount: To open FD, deposit at least ₹ 200.
• Fill the form: Take FD form from the post office and fill the correct information.
• Nomination Facility: You can also enroll in FD account.

Interest Rates in Post Office FD

• The 5 -year -old FD gets the highest interest.
• Interest rates are revised by the government every quarter.

Tax Benefits of Post Office FD Scheme

• There is a tax exemption of up to ₹ 1.5 lakh under Section 80C on 5 -year FD.
• Tax on interest income may be applied, if your total interest income is more than ₹ 40,000 (₹ 50,000 for senior citizens), then TDS can be deducted.
• Tax saving FD has a lock-in period of 5 years, in which premature withdrawal is not allowed.

Premature Withdrawal in Post Office FD Scheme

• 6 months after opening FD, you can withdraw premature withdrawal.
• Withdrawn between 6 months to 1 year, the interest rate of savings account will be available only.
• When withdrawn after 1 year, the interest rate of FD of that period will be applicable.
• Premature withdrawal in 5 -year tax saving FD is not possible.

Who is eligible for Post Office FD Scheme? (Eligibility)

• Any Indian citizen (in the name of a person, joint account, minor)
• There is no minimum age limit
• NRI cannot invest in this scheme

Documents required for investment in Post Office FD Scheme

• Aadhaar Card, PAN Card, Voter ID)
• Electricity Bill, Ration Card, Passport
• Passport Size Photo
• FD form

Other Benefits of Post Office FD Scheme

• Loan facility on FD: You can take a loan of up to 90-95% in lieu of your FD.
• Enrollment facility: Nominee can be added to FD account.
• Transfer facility: FD can be transferred from one post office to another.
• Online Transaction: Now you can deposit and withdraw money online in post office FD.

Bank FD and Post Office FD: Whom to choose? (Which is better: bank fd or post office fd?)

• If you want the government’s guarantee, higher interest rate, and tax exemption, then the Post Office FD Scheme is better for you.
• If you need flexibility, early withdrawal, and online banking, then the bank FD is right for you.
• Some schemes in Post Office FD may be more beneficial for senior citizens, as it gets better interest rates and facilities.
• In the bank FD, you get the option of monthly, quarterly or annual interest payment, while the post office FD only gets the annual interest.

Some important questions related to Post Office FD Scheme (FAQ)

Q1: Is Post Office FD completely safe?
Yes, this scheme is guaranteed by the Government of India, so investment in it is completely safe.

Q2: Can you invest online in Post Office FD?
Now many post offices have the facility to open and manage online.

Q3: How is Tax on FD?
There is a tax exemption under Section 80C on 5 -year FD, but interest income may be taxed.

Q4: How to get a loan on FD?
You can take a loan of up to 90-95% in lieu of your FD, which is 2-3% higher than the interest rate.

Q5: Can you transfer FD from one post office to another?
Yes, you can transfer FD from one post office to another.

Post Office FD Scheme Advantages and Damage (Pros and Cons)

Benefits (PROS)

• Government guarantee
• High interest rate
• Tax exemption
• Lower investment amount reduced
• Loan facility
• Enrollment and transfer facility

Damage

• Interest payment is only annually
• Premature withdrawal in 5 -year FD is not possible
• Interest rates can change every quarter
• NRI can’t invest

Conclusion

Post Office FD Scheme is a great option for those who want to protect their money and also get good interest. The investment process in this is easy, the minimum amount is low, and the government is also guaranteed. It has higher interest rates than bank FD, which increases your money rapidly. If you also want tax exemption, then 5 -year -old FD is the best option for you. However, you should choose the correct option from the bank FD and Post Office FD as per your need and convenience.

Disclaimer:

This information is based on the fresh interest rates and rules issued by government and financial institutions. The Post Office FD Scheme is a fully real and government -backed scheme. Before investing in it, keep in mind your need and financial goals and take the latest information of interest rates from the post office or their website. This article is only for information, before investing, please consult an expert.