Try a TD (Time Deposit) instead of an FD; how much will you get in 5 years by investing ₹1 lakh in a Post Office scheme?

Investing ₹1 lakh in a Post Office Time Deposit can earn you interest ranging from 6.9% to 7.5% over a period of 1 to 5 years. Over 5 years, you could earn approximately ₹44,995 in interest.

Post Office small savings schemes are popular among those who want to earn guaranteed returns while keeping their money safe. If you, too, wish to earn interest on your savings without taking significant risks, the Post Office Time Deposit (TD) scheme could be a suitable option.

In this scheme, investors can deposit money for a tenure of 1, 2, 3, or 5 years, depending on their needs. A key feature is that the investment tenure is fixed in advance, and the deposited amount earns interest at a predetermined rate.

What will be the returns on an investment of ₹1 lakh?

If an individual invests a lump sum of ₹1 lakh in a Post Office Time Deposit, here is the approximate return they could receive upon the completion of various tenures:

1-year investment: At an interest rate of 6.9%, you would earn approximately ₹7,081 in interest. The total amount at maturity would be around ₹1,07,081.
2-year investment: At an interest rate of 7%, you would earn approximately ₹14,888. The total amount at maturity would be around ₹1,14,888.
3-year investment: At an interest rate of 7.1%, you would earn approximately ₹23,508 in interest. The total amount would become around ₹1,23,508.
5-year investment: At an interest rate of 7.5%, you would earn approximately ₹44,995. Consequently, the total amount at maturity would be around ₹1,44,995.

What interest rate will you get on a deposit of ₹1 lakh?

The interest rate for Post Office Time Deposits varies based on the investment tenure. The government has made no changes to these rates for the October–December 2026 quarter. Currently, the annual interest rates offered are 6.9% for a 1-year deposit, 7% for a 2-year deposit, 7.1% for a 3-year deposit, and 7.5% for a 5-year deposit. Interest under this scheme is calculated quarterly, while the payout is made annually.

Tenure can be extended after maturity

Investors can choose to continue their Post Office Time Deposit even after the initial tenure concludes. To do so, an application must be submitted to the relevant post office within a specified timeframe. Requests for extension can be made within 6 months of maturity for a 1-year scheme, 12 months for a 2-year scheme, and 18 months for 3-year and 5-year deposits. Thus, Post Office Time Deposits serve as an option for those who wish to invest their savings for a fixed period, away from market volatility.

Tax benefits available on 5-year deposits

This scheme also offers a tax-saving option; however, this facility applies exclusively to 5-year Time Deposits. Under the old tax regime, investors can claim a deduction of up to ₹1.5 lakh under Section 80C of the Income Tax Act. It should be noted, however, that the interest earned on the deposited amount is subject to taxation.