Post Office Tax Saving FD: Fixed deposit is a guaranteed return scheme which is run by the post office and banks. Investors make one-time investment in a fixed deposit and get interest on it. When the FD matures, they withdraw money which include the principal and the interest. Post office runs FDs of various durations- one-year, two-year, three-year and five-year. Though all of them provide guaranteed return not all of them provide income tax relaxation on deposits up to Rs 1.50 lakh under Section 80C of the Income Tax Act, 1961. Five-year FD (Post Office FD) is the only FD that provides tax relaxation up to Rs 1.50 lakh on deposits. That's the reason it is also known as tax saving FD.
The five-year FD provides interest rate of 7.5 per cent, which is payable annually but calculated quarterly.
The minimum deposit in the FD is Rs 1,000 and in multiples of Rs 100.
There is no maximum limit. One can have a single as well as a joint account.
A guardian on behalf of a minor can also open an account. The five-year FD can ne extended for another tenure within 18 months of the maturity of the scheme.
Here's what Rs 3 lakh, Rs 5 lakh and Rs 10 lakh investment give you in post office tax saving scheme
If you invest Rs 3 lakh in the scheme, you get Rs 1,34,984 in interest and the maturity amount is Rs 4,34,984.
If you invest Rs 5 lakh in the scheme, you get Rs 2,24,974 in interest and the maturity amount is Rs 7,24,974.
If you invest Rs 10 lakh in the scheme, you get Rs 4,49,948 in interest and the maturity amount is Rs 14,49,948.
