Post Office FD Interest Rates 2023

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:

Post Office FD Interest Rates 2023

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.

Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer.

The Post Office schemes do not offer extra interest rates to senior citizens. In this way, the earnings are the same for people depositing the same amount of money irrespective of whether the investor is more or less than 60 years old.

Historical Trend In Post Office FD Interest Rates 

The following table highlights a comparison of the Post Office FD Rates between the period from December 2019 to March 2020 and from April 2020 to the present time.

Comparison Of Post Office FD Interest Rates 2023 With Indian Banks

Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer.

Key Aspects of Post Office FD Interest Rates 2023

• The post office FD interest rate compounds quarterly and is payable annually. 

• The interest rate applicable during the first deposit remains constant throughout the FD tenure. 

• Depositors can choose to receive the interest amount directly to their bank accounts. 

• Interest is only payable on the deposit amount. If the credited interest is not withdrawn by you, no interest shall be payable on the interest amount. 

• If you do not withdraw the sum on maturity, the final amount will not earn any interest unless you extend the tenure. 

• If you extend the tenure, the maturity amount earns interest at the prevailing rate as on the date of extension. 

Features of Post Office Fixed Deposit Account

The basic features of a fixed deposit account are mentioned below:

Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer.

Premature Withdrawal

• Premature withdrawals from the Post Office FD account can be made on submitting an application in Form-4. 

• Withdrawals are not permitted within 6 months from the date of deposit. 

• If the withdrawal is made after 6 months but within 12 months from the date of deposit, the interest applicable for those number of months is paid. 

Post Office FD Account Extension

• Account holder has to submit the application form for extension of the account, which is Form-3. 

• Once the tenure of your FD account expires, you can extend the tenure. 

• However, the window for extension is up to a few months only. If the tenure is not extended, the account holder has to compulsorily withdraw the amount on maturity. 

• Maturity can be extended twice from the date of the first deposit. 

• For a 1 year FD, you can extend the account 6 months from the date of repayment. 

• For a 2-year FD, an extension can be exercised 12 months from the date of repayment. 

• For a 4-year and 5-year FD, the extension can be exercised 18 months from the date of repayment.

On The Death Of The Account Holder

• If the account holder dies, the deposit amount is paid to the assigned nominees or legal heir. 

• If there is more than one legal heir, the amount is paid in proportions as specified by the account holder. 

• If proportions have not been specified, the amount shall be paid in equal proportions to all the legal heirs. 

• The deposit amount is paid to the guardian in case the nominee is a minor. 

• The Post Office FD account can be continued by the surviving heirs or nominees. If not, the account shall be closed and the deposit amount paid to the nominees.

Pledging The Post Office FD Account

• Your Post Office FD deposit can be pledged as security on the submission of Form-5 and an acceptance letter from the pledgee. 

• The account can be transferred to the President of India or the Governor of a State, the Reserve Bank of India or a Scheduled Bank or a Cooperative Bank, a public, private, or Government company, a housing finance company approved and notified by the National Housing Bank and the Central Government, respectively. 

• If an account was opened for a minor and the same has to be pledged, the guardian must certify that the child is alive. Further, the guardian also has to establish that the transfer shall benefit the minor. 

• The above condition also holds true for an account opened on behalf of a person of unsound mind. 

• An authorized officer needs to endorse the pledging if it is being transferred as security.

• A person physically unfit to pledge the account can do so by authorizing another person. 

Advantage of Post Office FD

Post Office Fixed Deposit scheme is one of the preferred choices of savings for many given the backing of the Indian sovereign. 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:

• This is a government scheme, so the Indian government takes the guarantee. This makes the investors more secure about their savings.

• One can open an account offline or online through net banking.

• As it is a not-for-profit establishment, its primary focus is on social welfare. 

• No tax (TDS) is charged on the interest earned with a post office FD account.

• One can make the deposits individually or jointly for a maximum of three members.

• Deposits that are made for five years qualify for tax deductions through the gross salary when the ITR (Income Tax Return) is filed (under section 80C). The maximum tax deductions can range up to Rs. One Lakh Fifty Thousand per Financial Year.

• One can easily transfer their FD account from one Post Office to another.

• One can open more than one FD account in any of the Post Offices.

• A minor can open an FD account under guardianship as well.

• Nominees can be added even after account opening.

Eligibility Criteria for Opening a Post Office FD Account

The below-mentioned people are eligible to open a Post Office fixed deposit account.

• Any resident of India can open this investment account either individually or jointly.

• The minors are also eligible to open a post office FD account. However, it should be under the guidance of some legal guardian.

• Companies, trusts, NRIs, and other organizations are not eligible to avail of the benefits or open an FD account.

Documents Required

An investor must furnish the below-mentioned documents to open a Post Office Fixed Deposit account:

1. Form-1

   This is the application form to open an account. 

2. Address Proof

   • Electricity Bill

   • Telephone Bill

   • ID or certificate issued by the Post Office

   • Bank statement including the cheque

   • Passport

3. Identity Proof

   • Pan Card

   • Voter ID Card

   • Driving License

   • Aadhaar Card

   • Passport

   • Photo Ration Card

   In addition to all the above-mentioned documents, an investor has to provide the nominee’s details. There has to be a witness when they are going to sign the paper of investment.

Post Office FD Calculator

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 to know the applicable interest rates of post office FD through the complete tenure.

In this tool, one has to enter the amount to be deposited, current Post Office FD interest rates, and tenure.

Sample Illustration Of Post Office FD Returns 

The process to Open Post Office FD

For opening the Post Office Fixed Deposit account, one can either use online or offline mode:

1. Online Mode

   The facility to open an account is available online through net banking. The internet banking service in the post office has been available since 2018. Investors can use the net banking facility to transfer funds across different post offices. For opening this account online, the customers should have the following documents:

   • An active and valid savings account

   • Verified KYC document

   • PAN card

   • Valid email id and mobile number

   • An active debit card or DOP ATM

   Steps to Open Post Office FD Online

   • Step 1: With the registered user id and password, log in to the e-banking platform of the Post Office

   • Step 2: Click on General Services.

   • Step 3: Search for the ‘Service Request’ and open it.

   • Step 4: Make the Time Deposit or Fixed Deposit opening request by using the option of ‘New Request’.

   • Follow further steps to complete the process.

2. Offline Mode

   For opening a Fixed Deposit account offline, one has to follow the below steps:

   • Get all the required documents and visit the nearest branch of the Post Office.

   • Get in touch with an official regarding the FD opening in the Post Office.

   • Enquire about the current FD interest rates there.

   • The concerned person will guide you through the complete FD opening process.

   • Ensure to take the receipt after successfully opening the FD account for future references.

Post Office Fixed Deposits – Tax Benefits

One of the most significant 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. Since Post Office FDs are meant for the low-income groups, there is no tax liability. However, if the interest earned exceeds Rs. 40,000 (in the case of regular customers) and Rs. 50,000 (in the case of senior citizens) in a financial year, TDS may be deducted. 

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. The tax benefit is subject to changes in tax laws.

Post Office FD Interest Rates – FAQs