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The interest rates on Post Office Small Savings Schemes are reviewed quarterly. The above rates apply for the quarter between January 1, 2023 and March 31, 2023.
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Post Office Fixed Deposit Scheme: If you want to save tax, then by investing in the post office fixed deposit scheme for 5 years, you can take advantage of tax exemption with better returns. Because the benefit of tax exemption is available on the investment made by individuals in the post office time deposit of 5 years. You must remember that the tax benefit is only available if the deposit is held for a full period of 5 years.
India Post offers FDs with various tenures like 1 year, 2 years, 3 years and 5 years, while investing in only 5 year FDs is eligible for tax savings under section 80C of the Income Tax Act, 1961.
Know when and how much interest is received
Post Office Time Deposit offers 6.6% on one year FD, POTD for 2 years and 3 years offers 6.8 and 6.9% respectively. For 5 years fixed deposit, it offers an interest rate of 7%.
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Explain that the interest rates on the post office’s small savings schemes are reviewed every quarter. The above rates apply for the quarter between January 1, 2023 and March 31, 2023. The interest rate is payable annually, no additional interest will be payable on the amount of interest that has become due to w paid but not withdrawn by the account holder.
Tax exemption is available under 80C
Section 80C of the Income Tax Act enables taxpayers to reduce their taxable income by making investments that save them money on taxes or cover certain eligible expenses. It allows an annual deduction from the gross income of the taxpayer up to Rs 1.5 lakh. Individuals who invest in a 5-year Post Office Time Deposit are eligible for tax benefits. Please note that the tax benefit is only available if the deposit is kept until the end of the tenure ie 5 years.
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Extend Fixed Deposit
Depositors have the option to extend their Time Deposit accounts for further terms after reaching their stated maturity. TD accounts can be extended within the specified time limit after the maturity date. The interest rate applicable to each TD account on the maturity date will be effective for the extended period.
Interest Rates for Senior Citizen
The Post Office Time Deposit does not offer any higher interest rate to seniors, unlike banks that offer 0.50% to 0.75% to senior customers investing in fixed deposits.