Trick to triple the amount from FD, invest ₹5 lakh for the child's future, and get ₹15 lakh!

Fixed Deposit is considered to be the safest investment option. Most people invest somewhere to meet all the expenses of children, and an FD is included in it. At the same time, the elderly also prefer to invest in FD to save their earnings from any risk. If you also want to make a fixed deposit in the name of your child, then this time open an account in the post office instead of the bank. There are options of FDs from 1 to 5 years in the Post Office FD. In a 5-year FD, you can create a fund of 15 lakhs by investing only 5 lakh rupees. But for this, you will have to apply a trick. Know about this.

If you invest money in Post Office FD for 5 years, then you will get interest at the rate of 7.5%. But you do not have to withdraw this amount after 5 years, rather you have to fix it again for 5 years, that is, you have to extend your FD. Extension will also have to be done twice. In this way, the total tenure of your FD will be 15 years.

Suppose you invest ₹5,00,000 in Post Office FD for 5 years. According to 7.5%, the maturity amount after 5 years will be Rs 7,24,974. You again fix this amount for the next 5 years. In such a situation, in 10 years you will earn Rs 5,51,175 through interest on an amount of 5 lakh and your amount will become Rs 10,51,175. This amount is more than double. Still you do not have to withdraw it but get it extended for the next 5 years. In this way your amount will remain deposited for a total of 15 years. In the 15th year, you will earn Rs 10,24,149 from interest only. In this way you will get Rs 15,24,149 as maturity amount.

Tax benefit is also given to the investor on 5-year FD. This benefit is given to you according to section 80C of Income Tax. You can claim a deduction of up to Rs 1.5 lakh in a financial year.

There are some rules for extension which you should understand. 1-year FD of post office can be extended within 6 months from the date of maturity, 2-year FD has to be extended within 12 months of the maturity period. For extension of 3 and 5 year FD, the post office has to be informed within 18 months of maturity period. Apart from this, you can also request for account extension after maturity at the time of opening the account. The interest rate applicable on the respective TD account on the day of maturity will be applicable on the extended period.

Let us tell you that like the bank, in the post office also you get the option of FD of different tenures. Different interest rates are offered for each tenure. Currently, 6.9% annual interest is being given on one year FD, 7.0% annual interest on two year FD, 7.1% annual interest on three year FD and 7.5% annual interest on five year FD.