The Indian Postal Department offers a wide range of investment options for investors in the country. Among these is the post office FD, which is highly preferred by investors looking for a safe investment to park their funds in. So, if you are also looking for an investment option that can give you guaranteed returns, the post office FD scheme may be a good fit for your needs.
Post office FD: An overview
Since the post office FD is offered by the government’s postal division, it is essentially backed by the sovereign guarantee, making the risk of default negligible. Aside from this, post office fixed deposits work much like regular FDs.
You deposit your lump sum amount for a fixed tenure. And over the course of your investment period, the amount earns interest at the rates specified by the government. The postal department notifies the interest rates every quarter. So, the interest is compounded on a quarterly basis. However, the payouts are made on an annual basis. A post office fixed deposit calculator can help you get a better idea of how much your investment will grow over the investment period. In fact, the interest rates offered on these FDs varies according to the period of deposit.
Check out the latest interest rates on post office FDs.
|Period of deposit||Interest rate|
So, how much can you get from your post office FD investment, on a monthly basis? Let’s find out.
Calculating the interest from your post office FD
If you want to know more about how much you can get monthly, from your post office FD, you can simply make use of a post office FD calculator. This is an online tool where you need to input certain details such as:
- The initial amount of investment
- The prevailing FD interest rate
- The compounding frequency
- The tenure of the FD
Once you submit the required details, the post office time deposit calculator will show you how much your FD will grow to. So, you will get a fair idea of the interest earned. You can then divide this interest amount by the number of months in your investment tenure to learn how much you can get from your post office FD investment.
For instance, assume that you use a post office fixed deposit calculator to compute your interest. The online tool shows you that the interest you will earn on a 3-year post office FD investment is Rs. 12 lakhs as interest. This means that your monthly interest will be calculated as follows.
= Rs. 12 lakhs ÷ 36 months
= Rs. 33,333 per month
If you’re still curious about how the post office fixed deposit calculator computes your maturity amount, here’s the formula that is used:
|FD at maturity (M) = P x [1 + (R ÷ 100)]NT|
P = Principal, which is the initial amount of investment
R = The rate of FD interest
N = Compounding frequency such as annual, half-yearly, quarterly or monthly
T = Tenure of the FD
So, to calculate the interest, you will have to subtract the initial investment from the maturity amount. Simple!
Now that you know how to find out your earnings from a post office FD, you can apply the same solution to all FDs. And if you’re looking for more safe investment options, Finserv MARKETS offers you a wide range of fixed deposits to choose from.