Post Office Fixed Deposit Rates

India Post also offers fixed deposit schemes that allow people to deposit their savings in time deposits and earn interests on them. Interest rates offered by India Post are among the highest rates offered for fixed deposits in India. Interests are paid annually whereas these are compounded quarterly under this scheme. Depositors have to deposit a minimum of Rs 200 in these FDs whereas there is no maximum limit under this scheme. Deposits made between these limits should be in multiples of Rs 200 only.

The table below details the interest rates on time deposits offered by India Post:

Time Deposit Tenure	Interest rate (in %)
1 year	6.90%
2 years	7.00%
3 years	7.20%
5 years	7.30%

Note: Interest rates applicable on deposits with effect from 01.10.2018 to 31.12.2018.

Features of Time Deposit Accounts

• Time deposit accounts have a tenure ranging from 1 year to 5 years.
• Depositors can open any number of FD accounts in any of the post offices.
• Minors aged 10 years or more can open and manage these accounts as well.
• Minors have to apply to get the account converted in their name after they become 18 years old.
• Joints accounts can also be opened by depositors in which the account should have two adult account holders.
• Depositors can convert these accounts from single to joint and vice versa quite easily.
• The minimum amount required to open a Time Deposit account is Rs 200.
• There is no maximum limit on the amount that can be invested under TD schemes.
• Deposits made for tenure of five years are eligible for tax benefits under Section 80C of the Income Tax Act of India, 1961.
• Time Deposit accounts can be transferred from one post office to another.
• There is no limit on the number of TD accounts that a depositor can open.
• On maturity, the TD account gets renewed automatically by the same period for which it was opened. The interest rate applied would be the rate offered by the Post Office on the day of maturity.
• NRI investors cannot deposit money in India Post Time Deposit schemes.
• Nomination can be done at the time of opening the account. However, if the nomination is not done before, the depositor can appoint a nominee even after opening the account.
• The account can be opened both by cash and cheque. In case of the cheque deposit, the date of realisation of the cheque in the account of the government should be the date of opening the TD.

Even though there are a number of fixed deposit schemes offered by various public and private sector banks, most depositors prefer POTDs for a number of reasons. Some of these reasons are:

• Guaranteed Returns: Post Office Time Deposits are backed by the Government of India and are hence completely safe and ensure guaranteed returns on the investment.
• Protection against Inflation: Whenever the inflation rate is below the TD interest rate, the depositor earns more.
• Higher Rate of Interest: Post Office Time Deposits offer relatively higher rate of interest. Currently, the rate of interest varies from 6.9% to 7.3%.
• Liquidity: Post office Time Deposits have a deposit lock-in period. But deposits can be withdrawn prematurely or the depositor can borrow against his time deposit in case of an emergency.
• Risk-free: POTDs are risk-free investment options. Funds once invested would provide complete returns on maturity whatever be the condition of the market.
• Tax Implications: Depositors can claim tax deductions of up to a maximum of Rs 1,50,000 under Section 80C of the IT Act, 1961 if they invest in 5 year Time Deposits.

A depositor can open multiple Post Office Tax Deposit accounts at any of the head post offices or general post offices. These accounts can also be transferred from one branch to another quite easily. This facility makes it easier for those people to invest money in deposit schemes who have to change their residence from time to time due to various reasons.

It is very easy to open a POTD account. Depositors can select any post office branch to open a Time Deposit account. In order to open the account, the depositor has to carry the following documents:

• Address and identity proof such as a copy of passport, driving license, voter ID card, Aadhaar card, ration card, PAN (Permanent Account Number) card or the income tax declaration form 60 or 61 as per the Income Tax Act, 1961.
• The original copy of the address proof used for opening the TD account.

• The depositor has to fill the POTD opening form provided by the Post Office.
• He then has to self-attest the copy of the proof provided for verification.
• The depositor has to choose a nominee who can withdraw the TD amount in case of death of the depositor.
• He has to show the original identity proof for verification at the time of opening the TD account.
• He also has to get the signature of a witness to complete the formalities and start the deposit.

Operating the Post Office Time Deposit Account

• The depositor has to have the pay-in slip with the initial deposit opening sum that will be credited into his account.
• He has to pay the amount in cash or cheque.
• At the time of maturity, he can either withdraw the amount or allow the post office to reinvest the amount in TD for the same tenure again. The rate of interest, however, may be different from the rate at which the previous account was offered.

Q. Can POTDs be opened online?

A. At present, POTDs can be opened only by visiting the post office. The depositor has to go to the nearest post office and apply for the Time Deposit scheme in person. The account is opened after the verification of details provided by the depositor.

Q. Can I transfer my Time Deposit account from the post office of one state to another?

A. Time Deposit account opened at one place can be transferred to any other branch of the post office in the same state as well as in other states. For example, a person who has opened a TD account in Delhi Post Office can get his account transferred to Chennai or Kolkata or Kohima without any issues.

Q. Can my TD account be renewed after maturity?

A. The Time Deposit account is renewed after maturity and if the depositor does not withdraw money after maturity, the amount is reinvested in the same TD but at the rate that is effective on the day of maturity.

Q. I do not have an Aadhaar Card. Can I invest in POTD?

A. Yes. A depositor has to have only one identity proof to open the account. He has to submit an attested copy of his identity proof and show the original copy at the time of account opening for verification. The documents that can be used to open the POTD account apart from Aadhaar card are PAN card, Voter ID card, driving license, passport or the income tax declaration form no. 60 or 61 as per the Income Tax Act, 1961.

Q. Can minors open POTDs?

A. Minors ageing 10 years or more can open a Post office Term Deposit account but they have to get it transferred in their name by applying for it when they become 18 years old. The rate of interest offered to minors is the same as that offered to regular citizens.

Q. Do senior citizens get additional interest on TDs?

A. No. The rate of interest is same for regular citizens and senior citizens. There is a Senior Citizen Savings Scheme (SCSS) offered by post offices where senior citizens get higher rates of interest on their deposits.

Q. Can NRIs benefit from POTDs?

A. No, only Indian citizens are allowed to open Post Office Time Deposit account. NRIs are not eligible for POTDs.