Post Office Time Deposit: Like banks, you also get the option of FD in post office. Different interest rates are given on FDs of different tenures. But if you want, you can more than triple your amount through the Fixed Deposit scheme of post office. Let us tell you how you can convert ₹5,00,000 into ₹15,24,149 through FD.
Know how much interest is being given on post office FD
Options of FD for 1, 2, 3 and 5 years are available in post office. 6.9% interest is being given on 1 year FD, 7.0% interest on 2 year FD, 7.1% interest on 3 year FD and 7.5% interest on 5 year FD.
How the amount will triple
If you want to convert ₹5,00,000 into a return of ₹15,24,149, then you will first have to invest in a 5-year FD and extend this FD twice for 5 years each, i.e. the FD will have to be continued for 15 years.
How will ₹15,24,149 be made, understand with an example
If you invest ₹5,00,000 in FD, then in the first 5 years you will get a return of ₹2,24,974 at the rate of 7.5% interest and the maturity amount will be ₹7,24,974. You have to extend it for the next 5 years. After the extension, you will get ₹3,26,201 as interest and the maturity amount will be ₹10,51,175. You will have to extend this FD for another 5 years. In the 15th year, you will get an interest of Rs 4,72,974 and your maturity amount will be Rs 15,24,149. In this way, in 15 years, you will earn a total of Rs 10,24,149 on your investment only from interest.
Rules for extension
1 year FD can be extended within 6 months from the date of maturity, 2 year FD has to be informed within 12 months of the maturity period and for the extension of 3 and 5 year FD, you have to inform within 18 months of the maturity period. Apart from this, you can also request for account extension after maturity at the time of opening the account. If you want, you can put the extension request at the time of account opening itself.
How much interest is given on extension
The same interest is given on the extended account which is applicable on the respective TD account on the day of maturity. For example, if you invest in FD for 5 years this month, then 7.5% interest will be given. In such a situation, you will get return on the extended account as per the same interest rate. At that time, even if the interest rate on 5-year FD changes, it will not affect your FD.
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