Post office term deposit scheme (TD) giving fixed term lucrative interest



oi-Kuntala Sarkar


Post office savings plans are popular among Indian citizens due to the security and lucrative interest rates. At present, many people are turning to mutual funds, SIP and stock markets, but the post office (PO) programs are still adopted by a large number of populations, mainly in rural areas. from India. The National Post Savings Term (TD) scheme is one of the most popular fixed schemes for its availability of small-scale savings with good interest rate options. The TD Account outperforms some other savings bank accounts. Another reason to choose the Post Office Time Deposit (TD) program is that you can withdraw your money from the program after 6 months of deposit if you need the money suddenly, on an immediate basis, unlike the Kisan Vikas Patra (KVP) or National Cash vouchers (NSC) per PO.

TD Account Interest Rate

Mandate Interest rate
1 year air conditioning 5.50%
2 years air conditioning 5.50%
3 years air conditioning 5.50%
5 years air conditioning 6.70%

Information source:

Interest under the Plan will be paid annually, but is calculated quarterly and, if desired, the interest amount will be credited to your TD Account itself. The investment of less than 5 years TD will be eligible for the benefit of Article 80C of the Income Tax Act, 1961. The deposit amount will be refundable after the expiration of 1 year, 2 years, 3 years and 5 years. However, at maturity, depositors can also extend the TD Account for another term for which the account was originally opened. You can transfer your TD Account from one PO branch to another.

Calculation of interest for example

Deposit amount (INR) Mandate Interest rate (percentage) Total amount of interest (INR)
100,000 1 5.50% 5614
100,000 2 5.50% 11229
100,000 3 5.50% 16843
100,000 5 6.70% 34350

Withdrawal rule

No deposit will be withdrawn before the expiration of six months from the date of the deposit. If the TD Account is closed after 6 months but before 1 year, the PO Savings Account interest rate will apply. If a 2, 3, or 5 year TD Account is prematurely closed after 1 year, interest will be calculated 2% less than TD’s interest rate for full years, and for a partial period of less than one year. year, PO savings interest rates will apply.

Account opening rule

The minimum amount for opening a TD account is Rs. 1000 and in multiple of Rs. 100 with no maximum investment limit. You can open the account for 1 year, 2 years, 3 years and 5 years. Anyone over 18 can open a TD Account with a Nominee, but a parent can also open an account on behalf of a child over 10. A joint account can be opened either in the name of 2 people, or in the name of 3 people, with the nominee. However, if the investor is an elderly person, he can invest in the Savings Plan for Seniors which will reach an interest rate of around 7.4%.

SBI interest rate for comparison

SBI’s fixed deposit (FD) regime interest rate for 3 years to less than 5 years is 5.30%, while for 5 years to less than 10 years, SBI will grant an interest of 5.40% (source: bank / deposits-deposits / deposits / fixed-deposit). It should also be remembered that the current interest rate for SBI SB deposit accounts (wef May 31, 2020) is 2.70% pa (source: deposits). Therefore, the National Post Savings (TD) Term Deposit Scheme is a popular scheme among ordinary Indians.

Article first published: Monday, September 27, 2021, 9:30 a.m. [IST]

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