Post Office Fixed Deposit (POFD) or also called Post Office Time Deposit (POTD) is one of the oldest and most preferred forms of investment offered by the Indian Postal Services. They are considered as safe as it is backed by the Government of India and is the best fit for risk-averse investors. Like banks FD, you can always calculate the interest amount by using a post office FD calculator in a hassle-free manner.
Post Office Fixed Deposit is similar to a regular bank deposit where the money is deposited for a fixed tenure and interest rate. The higher the investment tenure, the higher is the interest rate offered. The investor can earn a guaranteed return on the money deposited.
Calculating post office FD interest payout is pretty simple; all you have to do is use the compound interest formula given below for all the required details.
Maturity Value = Principal * (1 + Interest Rate/4)^(n*4)
Where n is the number of years
And the interest rate should be the annual rate. Please note that the above formula is for interest compounded quarterly
Example: Suppose a person has deposited 1 lakh at 7.8% interest for 5 years term, the maturity amount would be
Maturity value = 1,00,000 * (1+.078/4) (5*4)
Maturity Value = Rs. 1,47,145
Also Read, Post Office FD Interest Rates
The customer has to invest a minimum deposit amount of Rs. 200 and thereafter, in multiples of INR 200. Usually, one person can open only one fixed deposit account in the same bank, however, multiple FD accounts can be opened in post offices.
One can also open a post office FD in all public and private sector banks. One of the best features of a post office FD account is it can be transferred from one post office to the other. You cannot withdraw the amount before the first 6 months. After that, premature withdrawal is available at a penalty of 1%. Once the FD matures, one has got two options, viz.
Either it can be renewed for the same tenure or can be withdrawn. Post Office FD best suits highly conservative investors who want to invest a lump sum amount. The interest rates offered by post office FDs are sometimes higher than Bank FDs. An investor can take a loan against FD by requesting the post office.
Some of the upsides of using this calculator are listed down here