The Buyt Desk
Investors looking for a safe and secure investment that gives guaranteed return should look into these 3 Post Office Schemes With 5-Years Lock-In Period.
Off late, the market is not stable. There is a lot of fluctuation and instability in the stock market. People are not so comfortable investing in such an unstable and risky equity market. A stable alternative with good returns is post office schemes. The Post Office Small Savings Scheme gives higher returns in the long term.
There are three savings schemes in post offices that offer guaranteed returns which are the Post Office Recurring Deposit Account, Post Office – National Savings Certificate (NSC) and Post Office Time Deposit Account (POTD). The first two schemes have a lock-in period of five years. These are very beneficial for people who look for savings options without risk and for one who is apprehensive about the stock market. These are not just secure schemes that give good returns in the long run. These schemes are highly beneficial and safe as they are backed by Indian posts. Two of these schemes also have tax benefits.
Post Office Recurring Deposit Account
Post Office Recurring Deposit are an ideal investment for Investors who are seeking safe & secure returns. Recurring deposits (RD) offer guaranteed returns for 5 years. This scheme comes with quarterly compounding interest of a 5.8% interest rate. The minimum monthly investment to start investing in this scheme is Rs 100. And any amount over Rs 100 in multiples of Rs 10 can be invested monthly. This scheme has no maximum limit for investment.
Post Office Time Deposit Account (POTD)
Post Office Time Deposit Account is a fixed deposit scheme from the post office. Investors can make deposits for a fixed period of one, two, three or five years in the post office under this scheme. This scheme offers an interest rate of 5.5 % for 1, 2 and 3-year period FD and 6.7 % for 5 years period FD. This is a risk-free investment with good returns on investment. If you are okay with locking your money for 5 years then you should go for a 5-year POTD for maximum returns. One more benefit of this plan is tax deduction under Section 80C of the Income Tax Act, 1961. Under this scheme, the minimum deposit amount to have an FD account is Rs 1000. Here, the investment can be anything above Rs 1000 but in multiples of 100 and has no maximum limit for investment.
Interest rates for the different time periods of POTD –
1 year – 5.50 per cent
2 years – 5.50 per cent
3 years – 5.5 per cent
5 years – 6.7 per cent
Post Office – National Savings Certificate (NSC)
Post Office – National Savings Certificate is a very famous scheme. Many would have invested or at least heard of it. This scheme also has a lock-in period of 5 years and also offers good returns like the above two. This scheme offers a good rate of interest up to 6.8% on 5 years tenure. Investor needs to invest a minimum of Rs 1000 to have NSC. There is no upper limit for investment but investment should be in multiples of Rs 100. The withdrawal of funds from NSC can happen anytime after 5 years lock-in period. Premature withdrawal is allowed only under some special conditions. This scheme also provides tax benefits. Under section 80C of the Income Tax Act, the Post Office – National Savings Certificate is eligible for a tax deduction.
