Post Office Fixed Deposit Scheme 2023 – Interest Calculator

This is India’s First and most accurate Post Office Fixed Deposit Interest Calculator which accurately calculates the Interest on your term deposit.

The Post Office Fixed Deposit Scheme (POFDS) aka National Savings Time Deposit Scheme is a popular investment option for many Indians. It offers a safe and secure way to grow your money with guaranteed returns. The Post Office Time Deposit allows you to invest your money for a fixed period of time, with the promise of higher returns than traditional savings accounts.

One of the main benefits of National Savings Time Deposit Scheme is that it is backed by the government, making it a low-risk investment option. This means that your money is guaranteed to be safe, even in times of economic uncertainty. Additionally, the returns on POFDS are higher than those on traditional savings accounts, making it a great option for those looking to grow their money over time.

Another benefit of Post Office Fixed Deposit is that it is accessible to a wide range of investors. The minimum investment amount is only Rs. 1000, making it a great option for those with limited funds. Additionally, there is no maximum investment limit, so investors can put in as much money as they wish.

The Post Office Time Deposit Scheme also offers flexible investment options. It can be opened in the name of an individual, joint account holders, minors, and even as a trust. The interest rate of this Fixed Deposit scheme is also subject to change, but as of now, it is 7.0% per annum for a tenure of five years. You can check the latest interest rates by clicking here.

It is also a tax-saving investment option, if chosen for a period of 5 years. The investment made under Post Office Time Deposit Scheme is eligible for tax deductions under Section 80C of the Income Tax Act.

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Interest Calculation

Interest on Post Office Fixed Deposit Scheme is calculated on quarterly compounding and is payable on annual basis. This interest is available for withdrawal. No additional interest is payable on the amount of interest that becomes due for payment but is not withdrawn by the account holder. You can use the Post Office Scheme Excel Calculator to calculate the returns of various Post Office saving scheme.

Let’s assume that we deposited ₹1 Lakh in Post Office FD for a duration of 5 Years at 7% rate of interest. The total interest that will be generated over a period of 5 years will be a sum total of the interest generated every year. Let’s look at this deeper in the next screen.

Screenshot of Post Office Fixed Deposit calculator on everypaisamatters.com showing the deposit amount, Interest Rate, duration and Maturity amount.

In the below screen you can see that the interest generated for the first quarter is ₹1750. This is calculated as:

Amount = (Principal x (Rate / Periods)) ^ Time Period
Amount = (100000 x (7% / 4)) ^ 1 = 101750
(since we are calculating this quarterly and want to calculate only for 1 quarter, so we have taken the value of Time Period as 1).
For the second month, the amount will be calculated as following.
Amount = (101750 x (7% / 4)) ^ 1 = 103531

So, we can see that the same continues for an entire year and then the calculation again starts with principal becoming 1Lakh (as interest gets paid out on annual basis).

Screenshot of Post Office Fixed Deposit calculator on everypaisamatters.com showing how the interest gets calculated on quarterly and annual basis.

The cashflow and return statement looks like below and due to the compounding factor, the resultant XIRR comes to be 7.18%.
Question:- If you do not pay the amount annually, what would be the XIRR for such a return?

Screenshot of Post Office Fixed Deposit calculator on everypaisamatters.com showing the cashflow and the returns calculation.

Do you know how the returns of Post Office Fixed Deposit Scheme are compared to National Savings Certificate(NSC)? Read here.

In conclusion, Post Office Fixed Deposit Scheme is a great option for those looking to grow their money over a five-year period. It is a low-risk investment option that is backed by the government and offers higher returns than traditional savings accounts. Additionally, it is accessible to a wide range of investors, with a minimum investment amount of Rs. 200. Its tax-saving feature is an added benefit. It is a great option for those looking to save for a specific goal or to build a nest egg over time.

It is always recommended to consult a financial advisor before making any investment decisions. Make sure to read the terms and conditions of the scheme carefully before investing.

You can use the below calculator to see how much earnings can be generated using Post Office Fixed Deposit Scheme.

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