If you want to grow your wealth, don’t stash it away – invest it! Investing is the key to making your money grow faster. But deciding where to invest can be a crucial decision.
If you’re open to taking some risks, market-linked schemes can be a suitable choice.
However, for those seeking better returns with a safe investment, government-guaranteed schemes offer a reliable option.
When it comes to schemes with monthly deposits, you have several choices like Recurring Deposits (RD) and the Public Provident Fund (PPF).
But if you’re looking to invest a lump sum, consider the Post Office Fixed Deposit, also known as the Post Office Time Deposit.
Currently, it offers an attractive interest rate of 7.5% for a 5-year deposit, surpassing the PPF.
The power of compounding can help your investment double in just 120 months, which is a decade. Here’s how:
Imagine depositing Rs 5 lakh in a 5-year Post Office Fixed Deposit, which equals 60 months. You’ll earn interest at a rate of 7.5%, totaling Rs 2,24,974 over five years.
This means your initial Rs 5 lakh will grow to Rs 7,24,974. However, you don’t need to withdraw this amount. Instead, reinvest it for another 5 years.
In this scenario, your investment will swell to Rs 10,51,175, providing you with an interest of Rs 5,51,175 – more than your initial sum.
This way, you can double your investment in 120 months or 10 years. If you opt to invest Rs 10 lakh in a Post Office Fixed Deposit for a decade, you will receive Rs 11,02,349 as interest, resulting in a total of Rs 21,02,349 at maturity.
Keep in mind that Post Office Fixed Deposits offer various tenure options, including 1, 2, 3, and 5 years, with varying interest rates.
Currently, interest rates are 6.9% for 1 year, 7.0% for 2 years, 7.0% for 3 years, and 7.5% for 5 years.
Once you initiate an FD at a particular interest rate, it remains unaffected by rate changes during the tenure.
However, when you renew your FD after the term expires, the interest rate will be as per the prevailing rate at that time, which may be slightly different.