The government has withdrawn its decision to reduce interest rates on small savings schemes. In such a case, you will get 6.70% interest on the investment of money in the time deposit scheme of the post office. The country's largest bank SBI pays a maximum interest of 5.40% on a fixed deposit. Let's find out where you can get the most out of investing.
Important aspects of a time deposit scheme
Anyone can open a fixed deposit account at the post office by cash or check.
According to India Post, in the case of a check, the account will be deemed to have been opened from the date of receipt of the check in the government's account.
This account can also be opened in the name of a minor and a joint account in the name of two adults.
To open an FD account at the post office, a minimum deposit of Rs.1000 is required. There is no maximum limit.
Post Office Time Deposit Account offers interest at the rate of 5.5% to 6.7% for a period of 1 to 5 years.
Interest under this scheme is paid on an annual basis. But it is calculated on a quarterly basis.
Interest rate
Time interest rate (%)
1 year 5.5
2 years 5.5
3 years 5.5
5 years 6.7
How much interest is SBI paying on FD?
Duration
New rate for ordinary citizens (%)
7 to 45 days 2.9
46 to 179 days 3.9
180 to 210 days 4.4
211 days to 1 year 4.4
More than 1 year Less than 2 years 4.9
More than 2 years Less than 3 years 5.1
More than 3 years Less than 5 years 5.3
More than 5 years Less than 10 years 5.4
If you invest for 5 years, you will get the benefit of tax exemption
Tax exemption under Section 80C of the Income Tax Act 1961 can be availed by investing in this time deposit scheme and FD for 5 years.
Where will your money double if you invest?
Time deposit scheme
If you invest in this scheme, you will get maximum interest of 6.70%. According to Rule 72, it will take 10 years and 9 months for the money to double if you invest in this scheme.
SBI Fix Deposit
The maximum interest is 5.40%. According to Rule 72, if you invest in this scheme, it will take 13 years and 4 months for the money to double.
What is Rule 72?
Experts consider this to be the most accurate rule for determining how many days your investment will double. For example, if you have chosen a special scheme of the bank where you are getting annual interest, you have to divide 72 into 8 parts under Rule 72. That is, 72/8 = 9 years, which means your money under this plan will double in 9 years.
Note: Banks and Post Offices periodically review interest rates.
