Post Office Time Deposit Scheme: Interest up to 7.5%, guaranteed returns, fixed income, preclosure rules, other benefits

Post Office Time Deposit Scheme: Like banks, many types of schemes are run in post offices also. Fixed deposit is also one of them. This is called post office time deposit. Post Office Time Deposit Scheme is for 1, 2, 3 and 5 years. The interest rate varies according to tenure. At present, the maximum interest available on time deposit is 7.5 per cent, which is available on FD of 5 years.

But once you invest money, if you try to close the account before maturity, you may have to suffer loss.

How much will be the loss due to pre-mature closure?

Post Office Time Deposit Account cannot be closed before the expiry of six months from the date of deposit.

If you close the account after 6 months but before 1 year, you will get refund on investment as per the interest rate applicable on savings account.

At present, interest is available on Post Office Savings Account at the rate of 4 per cent.

Whereas if you close your FD account of 2, 3 and 5 years after one year, the money will be returned to you after deducting 2 per cent interest from the current interest rate applicable on time deposits.

That is, if you are getting interest at the rate of 7 per cent, then on premature closure done after 1 year, you will get interest at the rate of 5 per cent instead of 7 per cent, and if you are getting interest at the rate of 7.5 per cent, then on premature closure done after 1 year, you will get interest at the rate of 5 per cent.

In this situation, the interest will be reduced to 5.5 per cent.

What are the interest rates of Post Office TD?

On one-year account – 6.9% per annum interest
On two year account – 7.0% per annum interest
On three year account – 7.0% per annum interest
Interest on five year account – 7.5% per annum
Special things related to post office time deposit

• You can deposit a minimum of Rs 1000 in Post Office Time Deposit and there is no maximum limit.
• You can open as many accounts as you want, there is no restriction regarding the account.
• Whatever interest rate is there at the time of opening the account, the same interest rate will remain applicable till the completion of the account tenure.
• The interest on your investment in Post Office Time Deposit is calculated on the basis of quarterly compounding but this interest is collected and deposited in your account at the end of the year.
• Interest will be credited to your account on the completion of exactly one year from the date you opened the account.
• Any person above 18 years of age can open a TD account. Accounts can be opened for children on behalf of their parents or guardian.
• A child who has completed 10 years of age can operate their account with their signature. They can also open this account in their own name.
• If you open a time deposit account for 5 years, you can avail tax exemption under section 80C on the money deposited in it.