Post Office Time Deposit Scheme: Interest Rate, Fixed Income, Returns, Foreclosure Rules

Post offices offer a variety of schemes, and one of them is the Post Office Time Deposit, similar to a fixed deposit. You can choose durations of 1, 2, 3, or 5 years, each with its own interest rate. Currently, the highest interest, set at 7.5 percent, is for a 5-year deposit.

If you pull out your money before the agreed time, you might end up losing some of it.

What Will Be Effect on Your Returns Due to Foreclosure?

You can’t close a Post Office Time Deposit Account until six months have passed since you deposited the money.

Right now, you’ll earn 4 percent interest on your Post Office Savings Account.

If you close your 2, 3, or 5-year FD account after the first year, you’ll get your money back with a 2 percent deduction from the current interest rate for time deposits.

If you’re earning 7 percent interest now, closing the account early after a year means you’ll get 5 percent instead. The same goes for a 7.5 percent interest rate – it drops to 5 percent upon early closure after a year.

Interest Rate of Post Office TD

Here’s the breakdown: One-year account gets you 6.9% interest per year, two and three-year accounts both offer 7.0%, and if you commit to five years, the interest rate climbs to 7.5%.

Also read:

A Guide to Clever Tax Savings And Smart Money Moves

Here’re the Key Points to Remember Before Investing Post Office Time Deposit Scheme:

• With just Rs 1000, you can kickstart a Time Deposit at the Post Office, and there’s no limit to how much you can put in.
• No need to count accounts—open as many as you like without any restrictions.
• The interest rate you start with sticks around until your deposit matures.
• Even though interest is calculated quarterly, you get a yearly payout, like a financial birthday present.
• After exactly one year from opening, your interest lands in your account.
• Anyone 18 or older can dive into Time Deposits, and parents or guardians can set up accounts for kids.
• Kids over 10 can handle their accounts and even open one in their own name.
• Go for a 5-year deposit and enjoy tax perks under section 80C.