It was the year 1854 when Lord Dalhousie (Governor-General of India then) formed Indian Post. Since then this agency of the government is serving India in its 23 circles with 1, 55, 000 post offices. In this way, it is one of the widely distributed postal service networks of India.
With the delivery of mails and couriers, the Post Office is as well offering options for savings accounts, recurring deposit and fixed deposits with good post office interest rate. Some other investment policies offered by this government organization are Small Savings Scheme, Senior Citizen Savings Scheme, National Savings Certificate, Postal, Life Insurance, etc. Today, in this article we are going to discuss the FD interest rates offered by the Post Office of India:
The FD schemes of the Post office offer attractive investment returns that depend on the tenure of maturity selected by the investor. The range of the tenure is between one to five years. The below-mentioned table shows the updated Post Office interest rates.
Tenure of FD |
Interest Rate (% per annum) |
One year |
5.5% |
Two Years |
5.5% |
Three Years |
5.5% |
Five Years |
5.7% |
Note: The above-mentioned rates of FD interest are effective from April 1st, 2020 till June 30th, 2020.
The Post Office schemes do not offer some extra interest rates to the senior citizens. In this way, the earnings on some particular sum are the same irrespective of whether the investor is more or less than 60 years old.
The basic features of fixed deposit account are mentioned below:
Feature |
Details |
FD Tenure |
One, two, three, and five years |
Rate of Interest |
5.50% to 6.70% |
Minimum Deposit Amount |
Rs. 1, 000 |
Interest Payment |
Annually |
Premature Withdrawal |
It is allowed after six months |
Payment Mode |
Cheque / Cash |
Facility of Nomination |
Available |
Post Office Fixed Deposit scheme is one of the preferred choices of many. The reason for the same is the advantages offered by it. Apart from the higher post office FD interest rates, here are some of the most prominent benefits of having a Post Office FD scheme are:
The below-mentioned people are eligible to open a Post Office fixed deposit account.
An investor must furnish the below-mentioned documents to open a Post Office Fixed Deposit account:
In addition to all the above-mentioned documents, an investor has to provide the nominee’s details. There has to be a witness one he/she is going to sign the paper of investment.
Before start investing in the post office FD scheme, it is suggested to use the FD Calculator to know FD interest rates. One can use the FD calculator of Policybazaar for free for knowing the interest rates that he/she may get through the complete tenure at the applicable rates of post office FD.
In this tool, one has to enter the amount to be deposited, current Post Office FD interest rates, and tenure.
As soon as one enters the details and hit the calculate button, for estimating the earned interest and the amount at maturity separately.
For opening the Post Office Fixed Deposit account, one can either use online or offline mode:
Online Mode: The facility to open an account is available online through Intra operable mobile/ net banking. The internet banking service in the post office is available since 2018 through which the funds within different post offices can easily be transferred. For opening this account online, the customers should have the following documents:
Follow further steps to complete the process.
One of the biggest advantages of investing in Fixed Deposits of Post Office is that no tax or TDS is deducted on the earned interest. The main reason for the same is the nature of FD which is to provide benefit to the low-income groups and hence there is no tax liability.
An investor can add the fixed deposit investment in Post Office for claiming the deductions under section 80C of the IT Act, 1961. For every financial year, one can show a maximum of Rs.1.5 Lakhs in Post Office FD. Tax benefit is subject to changes in tax laws.