Post Office FD Interest Rates 2025

What Are Post Office FD Interest Rates?

Post Office Fixed Deposit (also known as Time Deposit) offers competitive interest rates, ranging from 6.90% to 7.50% p.a. Depositors can choose from four different deposit tenures, namely 1 year, 2 years, 3 years, and 5 years. Interests for these deposits compound every quarter, but payout is made annually. Post Office FDs are backed by the Government of India’s sovereign guarantee through the Union Ministry of Finance. These deposits ensure capital protection and predictable interest income. Current Post Office FD Interest rates are effective from July 1, 2025 and valid till September 30, 2025.

Note: Post Office FD interest rates w.e.f. 1st July 2025. Rates applicable till 30th September 2025 (interests compound quarterly)

Features of Post Office Fixed Deposit (Time Deposit Account)

The basic features of a Post Office FD interest rates account are mentioned below:

Note: It is advised to use an FD calculator to get an estimate of returns that can be earned before making an investment decision.

How Does the Post Office FD Interest Rate Scheme Work? 

To show the working of Post Office FD interest calculations, use the following example: 

Illustration for Post Office Fixed Deposit Interest Rates

Here’s an example of the potential returns for an investor named Sameer, who deposits a principal amount of ₹1 lakh in a Post Office Fixed Deposit. The estimated returns Sameer will receive if he chooses the tenure of 3 years or 5 years are below.

1. 3-Year Post Office FD

   • Principal: ₹ 1,00,000
   • Quarterly Rate: 1.775% (7.1% ÷ 4)
   • Effective Annual Rate (EAR): 7.36%
   • Maturity Amount: ₹ 1,23,676
   • Interest Earned: ₹ 23,676

2. 5-Year Post Office FD

   • Principal: ₹ 1,00,000
   • Quarterly Rate: 1.875% (7.5% ÷ 4)
   • Effective Annual Rate (EAR): 7.78%
   • Maturity Amount: ₹ 1,49,234
   • Interest Earned: ₹ 49,234

Note:

• The effective annual rate (EAR) is calculated as (1 + quarterly rate)^4 – 1.
• The latest India Post FD interest rates are 7.1% (3-year) and 7.5% (5-year) w.e.f. July 1, 2025 and valid till September 30, 2025.

Eligibility to Open a Post Office FD Interest Rate Account 

To open a Post Office Fixed Deposit (FD) account, you must meet the following eligibility criteria:

• Any Indian individual can apply.
• Minors above 10 years of age can open an account in their name.
• A guardian can open an account on behalf of a minor or a person of unsound mind.
• Not Eligible: NRIs, trusts, and companies are not permitted to open a Post Office FD account.

Documents Required to Open a Post Office FD

You need to submit the following documents to open a Post Office FD interest rate account:

• Proof of Identity (Any one of the following): Aadhaar Card, Voter ID Card, PAN Card, Driving License, Passport
• Proof of Address (Any one of the following): Aadhaar Card, Utility bills (electricity, water, gas), Ration Card

Process of Opening a Post Office FD Account Online and Offline

1. Online

   • Download the India Post Mobile Banking app from the Google Play Store.
   • Access the app by entering your login credentials.
   • Navigate to the 'Requests' tab within the app.
   • Choose 'Open POFD Account' from the options.
   • Complete the necessary details in the application and submit it.

2. Offline

   • Head to your closest Post Office branch.
   • The application form for Post Office Fixed Deposit.
   • Complete the essential details and attach the required documents.

Types of Post Office FD Schemes

The Post Office FD offers two fixed deposit schemes: the National Savings Time Deposit Account and the National Savings Monthly Income Account. While the time deposit scheme offers investment tenure from 1 year to 5 years, the monthly income is suitable for investors who prefer monthly interest income from a secure deposit. Here's are the details of the two Post Office FD schemes:

1. National Savings Time Deposit (TD) Account

   The National Savings Time Deposit Account (TD) is the Post Office's version of a traditional Fixed Deposit offered by banks. It's suitable for individuals seeking guaranteed returns over a fixed period.

   Current Interest Rates

   • 1-Year time deposit: 6.9% per annum
   • 2-Year time deposit: 7.0% per annum
   • 3-Year time deposit: 7.1% per annum
   • 5-Year time deposit: 7.5% per annum

   Note: Post Office FD rates w.e.f. July 1, 2025; valid till September 30, 2025

   Key Features:

   • Flexible Tenures: To match your financial goals, choose from 1, 2, 3, or 5-year deposit periods.
   • Interest Payment: Interest is compounded quarterly but paid annually to your Post Office Savings Account or bank account.
   • Investment Limits:
     • Minimum deposit: ₹1,000.
     • Deposits in multiples of ₹100.
     • No maximum investment limit.
   • Eligibility: Can be opened by a single adult, jointly (up to 3 adults), or by a guardian on behalf of a minor (10+ years can open independently).
   • Tax Benefits: The 5-year time deposit is eligible for tax deduction under Section 80C of the Income Tax Act.
   • Premature Withdrawal:
     • Not allowed before 6 months.
     • If closed between 6 months and 1 year, the Post Office Savings Account interest rate applies.
     • If 2, 3, or 5-year TDs are closed after 1 year, the interest rate will be 2% less than the TD rate for completed years.
   • Nomination: Facility available.
   • Account Transfer: Can be transferred between Post Offices.
   • Automatic Renewal: If not withdrawn, the FD automatically renews for the original tenure at maturity's prevailing rates.

   Note: For 5-year deposits opened on or after November 10, 2023, premature withdrawal is only allowed after 4 years, with the Post Office Savings Account interest rate applicable for the entire period.

2. National Savings Monthly Income Account (MIS)

   The National Savings Monthly Income Account (MIS) is ideal for investors seeking a regular interest income stream from their lump-sum investment.

   Current Interest Rate 

   • 7.4% p.a., paid monthly

   Note: rates w.e.f. July 1, 2025; applicable till September 30, 2025

   Key Features:

   • Fixed Monthly Income: Receive monthly interest payouts from the account opening date until maturity.
   • Tenure: Fixed at 5 years.
   • Investment Limits:
     • Minimum deposit: ₹1,000 
     • Maximum for a single account: ₹9 lakh.
     • Maximum for joint accounts: ₹15 lakh (share of each joint holder is equal).
     • Separate limits apply for accounts opened on behalf of minors (maximum ₹3 lakh).
   • Eligibility:
     • Can be opened by a single adult, jointly (up to 3 adults), or by a guardian for a minor (10+ years can open independently).
     • Any number of MIS accounts can be opened, subject to the maximum investment limit across all accounts.
   • Taxability: Interest earnings are fully taxable as per your income tax slab. No Section 80C benefits on investment.
   • Premature Withdrawal:
     • Not allowed for 1 year.
     • If closed between 1 and 3 years, 2% of the deposit is deducted.
     • If closed between 3 and 5 years, 1% of the deposit is deducted.
   • Nomination: Facility available.
   • Account Transfer: Can be transferred between Post Offices.
   • Maturity & Extension:
     • Upon maturity, the principal can be withdrawn.
     • The scheme can be extended for another 5 years by submitting an application.

What are the Benefits of the Post Office FD Interest Rate Scheme?

Below are the benefits of the Post Office FD Interest rate: 

• Flexible Tenure: Post office FD interest rate offers tenures ranging from 1 to 5 years.
• Multiple Accounts: Depositors can open multiple FD accounts in any post office.
• Minors' Access: Minors aged 10 and above can open and manage accounts, with conversion options at 18.
• Low Minimum Deposit: A minimum deposit of ₹200 is required to open a post office FD.
• No Maximum Limit: There is no cap on the maximum deposit amount.
• Joint Accounts: Joint accounts can be opened by two adults, with easy conversion options.
• Tax Benefits: Deposits for 5 years qualify for tax benefits under Section 80C of the Income Tax Act.
• Transferability: Post office FD Interest Rate accounts can be easily transferred between post offices.
• Automatic Renewal: Accounts are renewed automatically on maturity, maintaining the same tenure.
• Exclusion for NRIs: NRI depositors cannot open fixed deposit accounts in Indian post offices.
• Nomination Facility: Nomination can be done at account opening or even after.
• Payment Flexibility: Accounts can be opened with cash or cheque, with the cheque date as the account opening date.

What are the TDS Implications and Taxation for Post Office FD Interest Rate Account?

A significant advantage of placing funds in a post office fixed deposit is the absence of Tax Deducted at Source (TDS) on the interest accrued. When filing for Income Tax Return (ITR), individuals have the option to include their post office fixed deposit investments to qualify for deductions under section 80C of the Income Tax Act, 1961. The maximum deduction limit under this section of the IT Act, 1961 is capped at ₹1.5 lakh per financial year.

Conclusion 

With rates between 6.90% and 7.50% per annum, Post Office FD interest rates remain competitive compared to many other traditional savings products, particularly for those prioritizing capital safety and stable growth. For investors looking for peace of mind and assured returns, Post Office FDs stand out as a solid choice in the current financial landscape. One can easily calculate returns through the Policybazaar’s Post Office FD Calculator online.