Post Office Fixed Deposits: When we invest in a scheme, be it market-linked or non-market-linked, the first thing we think about is, will we get back the amount we have invested? And if you recover, how long will it last? This is why many investors choose investment schemes that offer guaranteed returns and minimize market risks. Post Office Fixed Deposit Scheme (Post Office FD) is one such investment scheme. The interest rate is 6.9% (1 year FD), 7.0% (2 year FD), 7.1% (3 year FD), 7.5% (5 year FD) per year.
While these FDs have fixed interest rates, you can also double the amount in post office FDs. To do so, you need to create a FD for 5 years and get an extension for another 5 years.
Find out what are the FD rules for extension and how you can double your investment in the post office scheme.
Know the rules for FD expansion
Post office fixed deposits can be extended for a specified period from the maturity date.
1-year FD can be extended within 6 months from maturity, 2-year FD can be extended within 12 months from maturity, 3-year and 5-year FD can be extended within 18 months from maturity.
You can also use the FD extension system, which you have to notify the post office when filling out the application form when opening an account.
The interest rate applicable to the TD account on the maturity date will also apply to the extension period.
How 500,000 rupees became more than 1 million rupees
If you invest in a 5-year FD from the post office, you will get an interest rate of 7.5%.
As per the post office calculator, an investment of Rs 5,00,000 will earn interest of Rs 2,24,974 after 5 years and the maturity amount will be Rs 7,24,974.
However, if you extend this account for another 5 years, the interest for that period will be Rs 5,51,175 and the maturity amount will be Rs 10,51,175.
This means that after 10 years, you will receive a return that exceeds your investment.
What you can get in a 5 year post office FD with an investment of 100,000 rupees to 1 million rupees.
FD amount (Rs) | Interest rate (Rs) | Maturity amount (Rs) |
1,00,000 | 44,995 | 1,44,995 |
2,00,000 | 89,990 | 2,89,990 |
3,00,000 | 1,34,984 | 4,34,984 |
4,00,000 | 1,79,979 | 5,79,979 |
5,00,000 | 2,24,974 | 7,24,974 |
6,00,000 | 2,69,969 | 8,69,969 |
7,00,000 | 3,14,964 | 10,14,964 |
8,00,000 | 3,59,958 | 11,59,958 |
9,00,000 | 4,04,953 | 13,04,953 |
10,00,000 | 4,49,948 | 14,49,948 |