Post Office Time Deposit account (TD) interest rates
Interest is calculated quarterly but paid annually.
Types of accounts
The National Savings Time Deposit scheme has 4 account options, each with different maturity periods of 1 year, 2 years, 3 years, and 5 years. Each account under this scheme provides a different interest rate based on the selected tenure. This flexibility allows investors to choose a plan that best suits their financial goals and time horizons, ensuring tailored returns on their savings over the chosen period.
Read Also: Post Office Saving Schemes: Meaning, Types and Benefits
Who should invest in POTD
The Post Office Time Deposit scheme is an ideal choice for conservative investors seeking guaranteed returns and low-risk options. With fixed tenures ranging from 1 to 5 years, it suits those with short-term financial goals. Senior citizens and retirees can benefit from regular interest payments, providing a secure income stream.
Read Also: Post Office Recurring Deposit Scheme
Tax benefits under Post Office Time Deposit account
Investments made in the 5 years' Time Deposit are eligible for tax benefits under Section 80C of the Income Tax Act, 1961. However, it is important to note that other account types, such as the 1 year, 2 years, and 3 years deposits, do not qualify for any tax benefits.
Premature withdrawal of Post Office Time Deposit (TD)
- No withdrawal is allowed within the first 6 months from the deposit date.
- If the Time Deposit (TD) account is closed after 6 months but before 1 year, the Post Office Savings Account interest rate will be applicable i.e., 4% p.a.
- If a 2/3/5-year TD account is closed prematurely after one year, the interest will be calculated 2% less than their respective interest rate.
- Premature closure of a TD account can be initiated by submitting the prescribed application form along with the passbook at the respective post office.
Extension of Post Office Time Deposit (TD) account
- The TD account can be extended within a prescribed period from the date of maturity: 1 year TD within 6 months, 2 years TD within 12 months, and 3/5 years TD within 18 months.
- Depositors can request an extension at the time of opening the account.
- To extend a TD account after maturity, depositors need to submit the prescribed application form and passbook at the respective Post Office.
- The interest rate applicable to the respective TD account on the day of maturity will be applicable to the extended period.
Also Read: Post Office FD Interest Rate Table 2024
Advantages of Post Office Time Deposit schemes
Post Office Time Deposit schemes offer several advantages, making them a popular choice for investors:
- Safety and reliability: Backed by the Government of India, Post Office Time Deposit schemes provide a secure and reliable investment option.
- Fixed returns: Investors receive fixed and guaranteed returns, providing stability and predictability in earnings.
- Flexible tenures: With different maturity options (1 year, 2 years, 3 years, and 5 years), these schemes offer flexibility to investors based on their financial goals and preferences.
- Tax benefits: Investments in the 5 years’ Time Deposit qualify for tax benefits under Section 80C of the Income Tax Act, providing a potential avenue for tax savings.
- Premature withdrawal options: While there are conditions, premature withdrawal is possible, providing some liquidity in case of urgent financial needs.
Features of Post Office Time Deposit scheme
- Post office time deposit schemes offer durations of 1, 2, 3, or 5 years, and only one deposit is allowed per account.
- Transferring time deposit accounts between post offices is easy.
- Time deposit accounts can be managed by one person or jointly by multiple people.
- Account holders can extend the duration of their accounts once they mature.
- There is no limit to the number of time deposit accounts you can open.
- The Post Office Time Deposit scheme requires a minimum investment of Rs. 1,000, but deposits must be made in multiples of Rs. 100. Any amount not in multiples of Rs. 100 will be kept in the account, and the remaining balance will be refunded without interest.
Eligibility criteria for opening a Post Office Time Deposit account
The Post Office Time Deposit has different account options to suit everyone. You can have a single adult account. For families, there is a joint account that can include up to three adults. Guardians can open accounts representing minors or person with unsound mind. Even minors above the age of 10 can open this account in their own name.
Documents required
To open a Post Office Time Deposit (POTD) account, you'll need:
- A completed application form
- A valid government-issued ID (Aadhaar card, passport, voter ID)
- Proof of address (utility bill, rental agreement, ration card)
- PAN card
- Passport-sized photographs
- Income proof (salary slips or bank statement)
How to apply for Post Office Time Deposit (POTD) scheme
1. Online process
- Go to the Indian Post eBanking website.
- Log in using your registered "User ID" and enter the captcha code.
- Click on the 'General Services' tab under the 'Service Request' option.
- Follow the on-screen instructions for opening a Post Office Time Deposit account.
2. Offline process
- Visit your nearby post office.
- Get and fill the POTD application form, along with all the required document.
- Deposit minimum Rs. 1000 to open a POTD account.
Read More: How to Login in EPFO
Post Office Time Deposit vs Other Post Office Savings Schemes
Product
|
Rate of Interest
|
Tenure
|
Premature Withdrawal
|
Income Tax Benefits under Section 80C
|
Time Deposit
|
5.5% to 6.7%
|
1 to 5 years
|
After 6 months
|
Only on 5-year time deposit
|
Recurring Deposit
|
5.8%
|
5 years
|
After 3 years
|
Yes
|
Monthly Income Scheme
|
6.6%
|
5 years
|
After 1 year but before 3 years/after 3 years
|
No
|
Sukanya Samriddhi Account
|
7.6%
|
Until the girl reaches 21 years of age or marries after 18.
|
After the girl reaches 18 years of age.
|
Yes
|
Public Provident Fund (PPF) Account
|
7.1%
|
15 years
|
After 5 years
|
Yes
|
Senior Citizen Savings Scheme (SCSS)
|
7.4%
|
5 years
|
After 1 year
|
Yes; TDS is applicable if interest earned is more than Rs. 50,000.
|
National Savings Certificates (NSC)
|
6.8%
|
5 years
|
Allowed in case of the certificate holder's death or via a court order.
|
Yes
|
Conclusion
The Post Office Time Deposit Scheme supported by the Indian government, offers a dependable and secure investment opportunity. Its varied maturity periods and competitive interest rates cater to a wide range of investors. The safety, fixed returns, and liquidity options make it a preferred choice, ensuring stability and meeting the financial goals of investors.
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