The humble post office near you undoubtedly offers some of the safest investment options. These are suitable for small investors, and also for those who want a guaranteed return on their savings. Depending on your needs, the time for which you want to spend and the period for which you want to remain invested, you can choose one of the many schemes offered by the post office.
The interest rate, tenure and other terms and conditions are different for different post office schemes. Hence, before choosing any scheme, you should carefully read all details about it and analyse if it will satisfy your needs.
One more crucial point that you need to know is the interest rates on post office schemes are revised by the Government of India regularly. In the last five years, interest rates offered on these schemes have been higher than the FD and other scheme rates offered by several large commercial banks.
Post Office Schemes on Offer
The post office schemes in which you can invest include Post Office Savings Account, National Savings Recurring Deposit Account, National Savings Time Deposit Account National Savings Monthly Income Account, Senior Citizens Savings Scheme Account, Public Provident Fund Account, National Savings Certificates (VIII Issue) Account Kisan Vikas Patra Account, Sukanya Samriddhi Account.
One can accumulate a large corpus by depositing their small savings in post office schemes over a long term. If you want to accumulate Rs 1 crore through post office scheme, you can choose schemes like NSC and PPF.
Here, let us take a look at the PPF account, which offers the facility to make monthly deposits and extend the account beyond the mandatory 15-year maturity period in batches of five years each. Supposing the interest rate remains same, you can accumulate approximately Rs 1 crore with Post Office PPF account by saving Rs 300/day or Rs 400/day in 26.8 and 23.5 years respectively.
Case 1: By saving Rs 300 per day, you can save and invest Rs 300×365 = Rs 109,500 in a year. This scheme allows, investment up to Rs 1.5 lakh in a year. Our calculation shows that at the current rate of 7.9 per cent per year, which is compounded annually, you can get about Rs 1 crore in 26.8 years. Remember, you will be able to withdraw this amount only after the completion of 30 years as this account, in our example, is extended in blocks of 5 years each.
You can also make monthly deposits in this account.
Case 2: By saving Rs 400 per day, you can save and invest Rs 400×365 = Rs 1,46,000 in a year. Our calculation shows that at the current rate of 7.9 per cent per year, you can get Rs 1 crore in 23.5 years. Remember, you will be able to withdraw this amount only after the completion of 25 years as this account, in our example, is extended in blocks of 5 years each.
For those making yearly investment in the scheme, depositing money at the start of the financial year can fetch best results. Also, daily savings can be made in Post Office Saving Scheme account. You can read details of all post office schemes on its official website.