Investment Tips: If you are one of those investors who may compromise on interest, but do not want to take any kind of risk regarding the money, then FD will definitely be included in your portfolio. If you want, you can create a good fund from your FD. People invest in Fixed Deposit, but they do not know the way to earn good profit from it. If you want to triple your money from FD, then know the way here.
Understand what to do
You get the option of FD with different tenures at both banks and post offices. You have to invest your money in 5-year FD. Bank or post office, wherever you get better interest, you have to invest money there. In the next slides, we will understand the way to triple the amount with the example of post office FD. You will have to use this trick to triple it
If you invest money in Post Office FD for 5 years, then you will get interest at the rate of 7.5%. But you do not have to withdraw this amount after 5 years, rather you have to fix it again for 5 years, that is, you have to extend your FD. Extension will also have to be done twice. In this way, the total tenure of your FD will be 15 years.
Now understand how 5 lakhs will become 15 lakh rupees
Suppose you invest ₹5,00,000 in Post Office FD for 5 years. At the rate of 7.5%, the maturity amount after 5 years will be Rs 7,24,974. You again get this amount fixed for the next 5 years. In such a situation, in 10 years you will earn Rs 5,51,175 through interest on an amount of Rs 5 lakh and your amount will become Rs 10,51,175. This amount is more than double. Still you do not have to withdraw it but get it extended for the next 5 years. In this way your amount will remain deposited for a total of 15 years. In the 15th year, you will earn Rs 10,24,149 only from interest. In this way you will get Rs 15,24,149 as maturity amount.
Tax benefit will also be available on 5-year FD
Tax benefit is also given to the investor on 5-year FD. This benefit is given to you according to Section 80C of Income Tax. You can claim a deduction of up to Rs 1.5 lakh in a financial year.
Understand the rules of extension
There are some rules of extension which you should understand. Post Office 1 year FD can be extended within 6 months from the date of maturity, 2 year FD has to be extended within 12 months of maturity period. Whereas for extension of 3 and 5 year FD, the post office has to be informed within 18 months of maturity period. Apart from this, you can also request account extension after maturity while opening the account. The interest rate applicable to the respective TD account on the day of maturity will be applicable on the extended period.
Post Office TD Interest Rates
Let us tell you that like the bank, in the post office also you get the option of FD of different tenures. Different interest rates are offered for each tenure. Currently, 6.9% annual interest is being given on one year FD, 7.0% annual interest is being given on two year FD, 7.1% annual interest is being given on three year FD and 7.5% annual interest is being given on five year FD.
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