Features of Post Office Fixed Deposits
Post Office Fixed Deposit (FD) Highlights
|Tenure||1, 2, 3 and 5 years|
|Minimum Deposit Amount||Rs. 1,000|
|Interest Rates||5.50% p.a. for 1, 2 and 3 year-tenures|
|6.70% p.a. for 5 year tenure|
|Interest Calculation||Compounded quarterly|
|Premature Withdrawal||Allowed after 6 months|
Post Office FD Interest Rates 2022
|Highest Slab Rate||6.70% p.a. (for 5 years)|
|For 1 year||5.50% p.a.|
|For 2 years||5.50% p.a.|
|For 3 years||5.50% p.a.|
|For 5 years (including tax-saving FD)||6.70% p.a.|
w.e.f 1 April 2022 to 30 June 2022
Types of Post Office FD Schemes
National Savings Time Deposit Account
- Tenor: PO FD can be opened for periods of 1, 2, 3 and 5 years.
- Minimum Deposit Amount: The minimum deposit amount for this account is Rs. 1,000 with further deposits to be made in multiples of Rs. 100.
- Taxation: Any investment under a 5-year PO FD account is eligible for taxation benefits under Section 80C of the Income Tax Act.
- Interest: The interest on a PO FD account is payable on an annual basis. For the purpose of interest calculation, it is compounded on a quarterly basis. In case the account holder doesn’t withdraw their interest amount on the due date, they will not be eligible for any additional interest on the interest amount.
- Extension: The depositor can extend their PO FD account for another tenor on its maturity. They can extend the account within a prescribed period from the date of maturity which is as follows:
- 1 year PO FD account – within 6 months of maturity
- 2 year PO FD account – within 12 months of maturity
- 3/5 year PO FD account – within 18 months of maturity
There will be no change in the interest rate if the account gets extended.
- Premature Closure: Any deposit under a PO FD account can be withdrawn only after 6 months from the date of deposit. The following conditions are applicable in case of account closure:
- If a 1 year PO FD account is closed after 6 months, the interest rate applicable on the deposit will be the same as a PO savings account.
- If a 2, 3 or 5 year PO FD account is closed after 1 year, the interest rate will be 2% less than the PO FD rate for the completed years while for the part period less than a year, the PO savings account rate will be applicable.
- Security/Collateral: A PO FD account can be either transferred or pledged as a security to several parties including:
- A housing finance company,
- Corporation, local authority or a government company,
- Cooperative bank or society, scheduled bank or a Reserve Bank of India
- Governor of a state or the President of India.
- Eligibility: It can be opened by any of the following individuals:
- An adult
- A guardian on behalf of a minor or a person of unsound mind
- A minor above 10 years in their own name
- A joint account holder (with upto 3 adults).