Post Office Time Deposits (POTD), popularly known as Post Office Fixed Deposits are backed by the government. Under this fixed deposit scheme, investors can earn interests of up to 6.7% p.a. the tenures for which you can choose to park your money under this scheme are 1 year, 2 years, 3 years, and 5 years.
The features of Post Office Fixed Deposit can be summed up as follows:
|Investment Tenure||1 year, 2 years, 3 years, and 5 years|
|Minimum deposit amount||Rs.1,000|
|Payment mode||Cash, Cheque, and Online Payment|
|Interest calculation and credit||Annual|
|Withdrawal before maturity||Allowed; Only after the completion of 6 months|
|Special Interest Rates for Senior Citizens||Not Applicable|
|Tax Benefits under Section 80C||Applicable only for 5-year Fixed Deposits|
The Government of India (GOI) is responsible for updating the rate of interest for Post Office Fixed Deposits. AS per the latest update, the rate of interests for the Post Office Fixed Deposits are listed below:
|Investment Tenure||Interest Rate|
|1 year||5.50% p.a.|
|2 years||5.50% p.a.|
|3 years||5.50% p.a.|
|5 years||6.70% p.a.|
Note: The rates of interest mentioned above are recorded as of 10 July 2020.
There are a host of benefits which can be enjoyed by investing in Post Office Fixed Deposit. These benefits can be listed as follows:
The eligibility criteria for Post Office Fixed Deposit can be listed as follows:
|Who can open the account?||Eligibility|
|Single adult||Should be at least 18 years old|
|Minors||He or she should be more than 10 years old|
|Minors (less than 10 years old)||Account can be opened by a legal guardian|
|Person of unsound mind||Account can be opened by a legal guardian|
The following documents will be required to open a Post Office Fixed Deposit account in any post office across the country:
|Proof of Identity||Aadhaar card, Voter’s ID card, etc.|
|Proof of Address||Aadhaar card, utility bills (such as electricity bill, water bill), ration card, etc.|
|Compulsory Document||PAN card|
|Photographs||At least 2 recent passport sized photographs|
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You can open a Post Office Fixed in any post office across India using both online and offline methods. Both the methods are discussed below:
1) Online Method:
The Post Office Fixed Deposit account can be opened online by using the internet banking facility offered by the post office. The following steps should be followed:
Step 1: Visit the official e-banking portal of post office at ebanking.indiapost.gov.in.
Step 2: Use your registered ID and password to log in to the portal.
Step 3: Click on the ‘Service Request’ option under the ‘General Services’ tab.
Step 4: Follow the on-screen directions and click on the ‘New Request’ option to initiate the Post Office Fixed Deposit or Time Deposit opening request.
2) Offline Method:
Alternatively, you can also visit your nearest India Post branch and collect the form for opening a new Post Office Fixed Deposit account.
Submit the copies of all the necessary document along with a duly filled up application form. The officials at the post office will guide you with further directions for the process.
Whether the tenure for your Post Office Fixed Deposit account is anywhere between 1 year to 5 years, in case of a premature withdrawal certain rules will be applicable. These rules are being pointed below:
Yes, you will be able to renew your Post Office Fixed Deposit account investment.
If you do not withdraw the money from your Post Office Fixed Deposit account after the maturity, the account will be renewed automatically. However, it should be noted that the interest rate for the renewed investment will be as per the rate of interest offered by the post office on the day of the renewal.
No, you are not eligible to open a Post Office Fixed Deposit account. It is open for Indian citizens only.
There is no upper cap on the deposit amount under the Post Office Fixed Deposit scheme.
No, you will not be required to pay any penalty in case you make a premature withdrawal. However, if the withdrawal is made within 6 months to 12 months from the date of opening the account, the interest that you will earn will be at par with the post office savings account scheme.
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