Consistent investment can generate substantial returns over the long term, a view widely shared by financial experts. At present, there is a wide array of investment options available in the market. However, it is important to note that all investments carry some level of risk. That said, certain investment instruments such as government schemes, bonds, and bank deposit schemes offer guaranteed returns and are considered virtually risk-free.
When it comes to bank deposit schemes, fixed deposits (FDs) are typically the first option that springs to mind, and rightly so. At the moment, banks are offering relatively attractive interest rates on FDs. Moreover, senior citizens benefit from even higher rates compared to the general public. If desired, one can also open an FD account in the name of an elderly family member.
Fixed deposits remain a popular and trusted investment option in India. It’s worth noting that interest rates on FDs vary from one bank to another. In addition to banks, FDs can also be opened through the Post Office, which offers a similar savings product.
This year, the Reserve Bank of India (RBI) has reduced the repo rate by 1.00%, leading banks across the country to lower their FD interest rates. However, the Post Office has maintained its higher interest rates, unaffected by the repo rate cut. As a result, Post Office FDs continue to offer appealing returns. For instance, let’s explore how much one would earn after 24 months by opening a Post Office FD of Rs 1 lakh in the name of their spouse.
Post Office Fixed Deposits, also known as Time Deposits (TDs), are similar to bank FDs, offering guaranteed returns over a fixed tenure. Investors can choose from four term options: 1, 2, 3, or 5 years. The current interest rates offered by the Post Office are 6.9% for a 1-year TD, 7.0% for a 2-year TD, 7.1% for a 3-year TD, and 7.5% for a 5-year TD.
The minimum deposit amount is Rs 1,000, with no upper limit, meaning investors can deposit any amount they choose.
Returns on a Rs 1,00,000 Deposit: The Post Office offers uniform interest rates to all its customers, regardless of age or gender. So, whether the account is in the name of a man, woman or senior citizen, the interest rate remains the same.
If Rs 1,00,000 is deposited in a 2-year TD account at the Post Office in the name of one’s wife, the total amount received at maturity would be Rs 1,14,888. This includes the initial investment of Rs 1,00,000 and interest of Rs 14,888.
The Post Office TD scheme is particularly attractive for those seeking secure, risk-free returns, as the interest rate is fixed for the entire term and not subject to market fluctuations.