Post Office: This scheme can earn ₹10,00,000 on an investment of ₹5,00,000 just by earning interest..

When it comes to investments with safe and guaranteed returns, crores of Indians trust bank and post office schemes the most. Here, your money is 100% safe, and the return is also fixed in advance. One such superhit scheme of the post office is Time Deposit, which we also call Post Office FD (Fixed Deposit) in common language.

If you are also an investor who does not want to take market risk, but also wants to see your money grow rapidly, then this scheme of the post office can be helpful for you. You can also earn more interest than the principal through this scheme. Meaning if you invest 5 lakhs, then you can earn 10 lakh rupees from interest. You just have to adopt a special method for this. Know about this.

What is Post Office Time Deposit (POTD)?

It works exactly like a bank FD. You deposit a lump sum amount for a fixed period and get a fixed interest rate on it. In the post office, you can open a time deposit account for 1 year, 2 years, 3 years, and 5 years. The interest rate is different for each period.

Current interest rates (July-September 2025 quarter)

1 year TD: 6.9%

2-year TD: 7.0%

3-year TD: 7.1%

5-year TD: 7.5%

Apart from this, by investing in the 5-year TD of the post office, you also get a tax exemption of up to Rs 1.5 lakh under Section 80C of the Income Tax Act.

How will the money be more than doubled? Know the power of 'extension'

Most people withdraw money when their FD matures. But the post office also gives you the option to extend your time deposit after maturity. And when you do that, the real power of compounding starts showing its magic. To earn double the interest of the original, you have to extend it twice.

Let's understand this through calculation:

Suppose you have made a 5-year TD of ₹5,00,000 in the post office.

Math for the first 5 years
Investment amount: ₹5,00,000
Interest rate: 7.5% (annual compounding)
Interest you will get after 5 years: ₹2,24,974
Total amount on maturity: ₹5,00,000 + ₹2,24,974 = ₹7,24,974

So far, everything is fine. Now, most people will withdraw this ₹7.25 lakh. But you don't have to do this. You have to extend this FD for the next 5 years.

Magic of the next 5 years (total math for 10 years)

Now your new principal will be: ₹7,24,974 (old principal + interest)

For the next 5 years, you will get interest at the rate of 7.5% on this entire amount (assuming that the interest rate remains the same).

After 10 years, your total interest will be: ₹5,51,175

Total amount on maturity after 10 years: ₹5,00,000 + ₹5,51,175 = ₹10,51,175

Should I get an extension again?

You don't have to withdraw money even in the 10th year. You will have to extend it once again, meaning you will have to continue it for 15 years.

Now look at the math for 15 years.

Now your new principal will be: ₹10,51,175 (old principal + interest)

For the next 5 years, you will get interest at the rate of 7.5% on this entire amount (assuming that the interest rate remains the same).

After 15 years, your total interest will be: ₹10,24,149

Thus, the total amount on maturity after 15 years: ₹5,00,000 + ₹10,24,149 = ₹15,24,149

It means you invested 5 lakh rupees, but earned 10,24,149 rupees on it only from interest. In this way, you have created a fund of 15,24,149 rupees from 5 lakh.

What are the rules of account extension?

There are some simple rules to follow to extend the account:

You can request an extension at the time of opening the account, or you can extend it even after maturity.

Time limit

A 1-year TD can be extended within 6 months from the maturity date.

2 A 2-year TD can be extended within 12 months from the maturity date.

3 and 5-year TD can be extended within 18 months from the maturity date.

Interest rate: When you extend the account, the same interest rate is applicable to it which is applicable on the TD of that period on the day of maturity.

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