What am I?
I am a fixed-income, long-term, virtually risk-free investment plan provided by the government of India. You can buy me from any local Indian post office or from an authorized agent.
How do I work?
I let you earn an interest rate of 8.25%, but you need to remain invested in me for eight years and seven months. You need to shell out a minimum of Rs100 to buy me; there is no maximum limit. I am available in denominations of Rs100, Rs500, Rs1,000, Rs5,000, Rs10,000 and Rs50,000.
What’s good about me?
The best thing about me is that I double your money. If you invest Rs5 lakh in me, you would walk away with Rs10 lakh after eight years and seven months. Unlike a National Savings Certificate, where premature withdrawals are not permitted, I permit you to withdraw after two years and six months or in case of the holder’s death. I can even be pledged as a security for taking a loan.
Red flags about me
I do not give any tax benefits. Also, before you are tempted by the double-your-money offer, remember there are other options that give you higher returns, though with slightly more risk.