Post Office Savings Scheme: Why this 3-year FD is most popular with investors

Business Business

Posted by AI on 2025-08-25 09:30:49 | Last Updated by AI on 2025-08-26 18:14:11

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A Rs 1 lakh deposit in a 3-year Post Office FD grows to Rs 1,23,508, giving Rs 23,508 as interest - returns that beat most regular bank FDs.

One of the safest investments you can make is a fixed deposit (FD). They are offered by banks and post offices, and while the FD rates are not always stellar, they offer guaranteed returns and are therefore sought-after by risk-averse investors.

If you are looking to invest in an FD, one option you should consider is the three-year time deposit offered by India Post, the Post Office Savings Scheme. This FD offers impressive returns and is government-backed, making it a safe investment option.

Suppose you invest Rs 1 lakh in this FD. In this scenario, at the end of the term, you will get Rs 1,23,508, with an interest accumulation of Rs 23,508. This is because the FD interest rate for this post office scheme is 6.7%.

This interest rate is higher than most regular bank FDs. For instance, the interest rate for a similar FD at the State Bank of India (SBI) is 5.75%, which would give an interest accumulation of Rs 18,875 on a Rs 1-lakh deposit.

This post office FD interest rate is also higher than the interest rates on other post office investments, like the popular Public Provident Fund (PPF), which offers an interest rate of 7.1% and therefore gives an interest accumulation of Rs 15,386 on a Rs 1-lakh deposit.

The three-year post office FD is an excellent option for risk-averse investors who want to make safe investments and get decent returns on those investments.

At the same time, these investors can enjoy the flexibility of choosing their mode of investment, which includes cash, cheque, or electronic clearance service (ECS). Additionally, investors can choose the mode of receipt of interest, which can be received through electronic credit through the Real Time Gross Settlement (RTGS) facility, or through the post office savings account, or an annual interest warrant.

If you are looking to make a low-risk investment for your surplus money, the three-year FD by India Post could be a great choice.

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