What is Post Office Time Deposit Interest Rate

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Post office time deposit account is also known as Post Office Fixed Deposit Account.

Now these days every bank is offering high interest rates on fixed deposits as compared to previous years. Here, I must say Post Office Time Deposits are the safest option.

Post Office Time Deposit Interest Rate

In the Post Office interest on fixed deposit is payable annually but calculated quarterly. You can open a fixed deposit in the post office with a minimum amount of Rs. 1000/- and then deposit in multiple of Rs. 100. There is no maximum limit.

Here are the interest rates:

Period Interest Rate
1 year to less than 1 year 1 day 6.90%
1 year 1 day to less than 2 years 7.00%
2 years 1 day to less than 3 years 7.10%
3 years 1 day to 5 years 7.50%
Table showing Post Office Time Deposit Rates as on 9th March 2024

Note: Interest rates are subject to change by the Government of India. For latest interest rates please visit the Official Post Office Site

Who can Open Post Office Time Deposit Account?

Individuals above 10 years
This includes adults and minors. For minors, a guardian can open the account on their behalf. Once the minor reaches adulthood, they’ll need to apply to convert the account to their own name.

Joint accounts
Up to three individuals can hold a joint Time Deposit account

A Guardian on behalf of Minor

A Guardian on behalf of Person of Unsound Mind

A Minor above 10 years in his own name.

Resident Indians
Indian citizens residing in the country are eligible.

You can open multiple TD accounts without any restrictions. Accounts can be easily transferred from one post office to another

Types of Post Office Time Deposit Accounts

  • Account type for 1 year, 2 years, 3 years, 5 years.
  • The account can be opened with a minimum of Rs. 1000 and in multiple of Rs. 100. No maximum limit for investment.
  • Interest shall be payable annually, No additional interest shall be payable on the amount of interest that has become due for payment but not withdrawn by the account holder.
  • The annual interest may be credited to the savings account of the account holder by applying.
  • The investment under 5-year Term Deposit qualifies for the benefit of section 80C of the Income Tax Act, 1961.

5 years Post Office Time Deposit

Here’s what you need to know about 5-year Post Office Time Deposits (Fixed Deposit):

Guaranteed Returns Post Office FDs are backed by the Government of India, offering a safe and secure investment with guaranteed returns.
Competitive Interest Rates  Five-year Post Office FDs currently offer one of the highest interest rates among government-backed savings schemes in India, with a rate of 7.5% per annum (as of March 9, 2024).

This rate is compounded quarterly, which means you earn interest on the interest earned earlier, leading to a higher overall maturity amount.

Tax Benefits  Investments up to ₹1.5 lakh in a 5-year Post Office TD can qualify for tax deduction under Section 80C of the Income Tax Act, 1961. This can help you reduce your taxable income and potentially save on taxes.
Flexible Investment Options You can invest a minimum of ₹1,000 up to a maximum of ₹9 lakh in a single account (and up to ₹15 lakh in a joint account) for a tenure of 5 years.

Overall, a 5-year Post Office Time Deposit can be a good investment option for those seeking secure and guaranteed returns over a long-term horizon. However, it’s important to consider your individual financial goals and risk tolerance before making an investment decision.

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