Post Office FD Plan : Looking for a safe and profitable investment option? The Post Office Fixed Deposit (FD) scheme could be the ideal choice for you. Backed by the Government of India, this scheme offers attractive interest rates, tax-saving benefits, and guaranteed returns. If invested wisely, you could earn as much as ₹44,995 every month after just 5 years of disciplined savings. Let’s dive into how this plan works and how you can make the most of it.
What is a Post Office Fixed Deposit (FD) Scheme?
The Post Office FD, officially known as the Post Office Time Deposit Scheme, is a government-backed saving option available at all India Post branches. It allows investors to deposit a lump sum amount for a fixed tenure and earn interest on it at attractive rates. The key features include safety, fixed returns, and flexibility in tenure.
Key Features:
- Backed by the Government of India — extremely safe
- Fixed interest rates, reviewed quarterly by the Ministry of Finance
- Tenure options: 1, 2, 3, and 5 years
- Tax benefits under Section 80C (for 5-year deposit only)
- Minimum deposit starts at ₹1,000
- No maximum limit on investment
How to Earn ₹44,995 Monthly Using the Post Office FD Plan
The goal of earning ₹44,995 per month from a Post Office FD is achievable if you invest a lump sum amount for 5 years and opt for the Monthly Income Scheme (MIS) strategy after maturity. Here’s how the numbers play out:
Step-by-Step Strategy:
- Invest a large amount (e.g., ₹10 lakh or more) in a 5-year FD.
- Let the compound interest grow over the 5-year period.
- After maturity, use the maturity amount to invest in Post Office Monthly Income Scheme (POMIS).
- Receive monthly interest payouts from POMIS.
Let’s break this down with real numbers.
Investment & Returns Table – 5-Year FD Growth
Below is an approximate return table assuming you invest various amounts in a 5-year Post Office FD at an interest rate of 7.5% per annum, compounded quarterly:
| Initial Investment | Interest Rate (Annual) | Maturity Period | Maturity Amount | Total Interest Earned |
|---|---|---|---|---|
| ₹5,00,000 | 7.5% | 5 Years | ₹7,21,359 | ₹2,21,359 |
| ₹7,50,000 | 7.5% | 5 Years | ₹10,82,039 | ₹3,32,039 |
| ₹10,00,000 | 7.5% | 5 Years | ₹14,42,719 | ₹4,42,719 |
| ₹15,00,000 | 7.5% | 5 Years | ₹21,64,078 | ₹6,64,078 |
| ₹20,00,000 | 7.5% | 5 Years | ₹28,85,438 | ₹8,85,438 |
| ₹25,00,000 | 7.5% | 5 Years | ₹36,06,797 | ₹11,06,797 |
| ₹30,00,000 | 7.5% | 5 Years | ₹43,28,157 | ₹13,28,157 |
Note: These are approximate values and may slightly vary depending on quarterly compounding and applicable rates during the time of investment.
Monthly Income After 5 Years: Use POMIS Strategy
After the FD matures, you can reinvest the maturity amount in the Post Office Monthly Income Scheme (POMIS), which currently offers 7.4% annual interest (as of the latest update), payable monthly.
Here’s how you can receive monthly income using your maturity corpus:
| Maturity Corpus | POMIS Interest Rate | Monthly Income | Annual Income |
|---|---|---|---|
| ₹9,00,000 | 7.4% | ₹5,550 | ₹66,000 |
| ₹15,00,000 | 7.4% | ₹9,250 | ₹1,11,000 |
| ₹25,00,000 | 7.4% | ₹15,416 | ₹1,85,000 |
| ₹44,995/month | 7.4% | ₹44,995 | ₹5,39,940 |
| Required Corpus | 7.4% | — | ~₹60–65 Lakhs |
To get a monthly income of ₹44,995, you’ll need a corpus of approximately ₹60–65 Lakhs post maturity, which can be built by investing ₹35–40 Lakhs now in a 5-year FD at current rates.
Why Choose Post Office FD Over Bank FD?
While both are fixed return instruments, the Post Office FD has certain advantages over bank FDs, especially for risk-averse investors.
Comparison Table: Post Office FD vs Bank FD
| Feature | Post Office FD | Bank FD (Private/Public) |
|---|---|---|
| Safety | Very High (Govt. Backed) | Varies by Bank Rating |
| Interest Rate | 6.9%–7.5% (5-Year) | 6.0%–7.5% |
| Minimum Deposit | ₹1,000 | ₹1,000–₹5,000 |
| Tax Benefit | Yes (only 5-Year Term) | Yes (only tax-saving FDs) |
| Premature Withdrawal | Allowed with penalty | Allowed with penalty |
| Compounding Frequency | Quarterly | Quarterly or Monthly |
| Payout Option | Quarterly/On Maturity | Monthly/Quarterly/Maturity |
Benefits of Investing in Post Office FD
Here are the reasons why more investors are shifting towards Post Office Fixed Deposits:
- Guaranteed Returns: Your capital and interest are fully protected.
- Attractive Interest Rates: Currently among the best in secured deposit schemes.
- Tax Savings: Enjoy benefits under Section 80C up to ₹1.5 lakh.
- Quarterly Compounding: Accelerates wealth growth.
- Simple Process: Open FD in any post office with minimal paperwork.
See more : EPS Pension Hike to ₹7,500
How to Open a Post Office FD Account?
It’s quite easy to start investing in a Post Office FD. You can open an account at your nearest post office or even use the India Post Payments Bank (IPPB) app for selected services.
Documents Required:
- Aadhar Card
- PAN Card
- Passport-size photograph
- Post Office Savings Account (for linked benefits)
- Completed FD application form
Account Opening Options:
- Single Account
- Joint Account (Up to 3 adults)
- Minor Account (Through guardian)
Important Things to Keep in Mind
- The interest rate is locked for the entire tenure once you open an FD.
- Premature withdrawal is allowed after 6 months, but interest rates will be adjusted.
- TDS is applicable if annual interest exceeds ₹40,000 (₹50,000 for senior citizens).
- FD can be auto-renewed upon maturity.
Should You Invest?
If you are looking for a low-risk, government-backed way to grow your savings and create a stable monthly income, then the Post Office FD scheme followed by investment in POMIS is a smart, time-tested choice. It not only ensures wealth accumulation but also provides you with a steady monthly payout that can act as a pension or secondary income.
Also Check : SBI PPF Scheme
This strategy is especially suitable for:
- Retirees seeking monthly income
- Salaried individuals planning for early financial freedom
- Parents saving for their child’s education or marriage
- Anyone who prefers guaranteed returns over market risks
The figures, interest rates, and projections mentioned in this article are for informational purposes only and based on rates available as of March 2025. Interest rates are subject to change as per government notifications. Please consult a financial advisor or visit your nearest post office for the latest updates and personalized advice.
How can one earn ₹44,995 monthly with a Post Office FD plan?
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By investing wisely for 5 years.
Savings in Post office is really very good. It gives a good return for the investor like me. It’s very safe and easy to handle. Ian totally in love with the post office savings
PostOffice FD is Avery safety
Deposit scheme.Also the time period of five years gives the PO to chew on behalf of Us.Save in Post office keep your family Qualified