The Post Office Time Deposit Account is a prominent investment scheme that is offered by the Indian Post. This scheme is open to every individual and is more popular in the remote and rural areas of the nation,
which relatively has limited access to investment products.
The following are the key features of Post Office Time Deposit:
The depositors have the option to open the time deposit account for a period of 01, 02, 03 or 05 years. However, the account term will be extended by simply giving an application to the post office.
The minimum sum required to open the account is Rs 1000. The individuals can deposit the amount in multiples of Rs 1000; however, there is no maximum upper limit cap. The initial deposit can be made either in cheque or in cash. If the payment is made via cheque the encashment date will be set as the opening date of the account.
The POTD account does not permit premature withdrawal within the initial 06 months. In case the corpus is prematurely withdrawn the post office time deposit rate between 06 months and 12 twelve months is going to adhere to the prescribed rate for the savings account.
Anyone who does not withdraw the amount even after maturity of the time deposit account won't receive any extra interest. In case the post office has a core banking solution, then the time deposit can be renewed for the same term that was selected originally. The POTD interest rate is going to be applicable at maturity after the renewal.
The interest with the principal is going to be paid either in cheque or cash. Any payment that higher than the sum of Rs 20,000 will be made with a cheque.
The income tax benefits are accessible only for the 05-years. The depositor will be able to claim the income exemptions up to Rs 1.5 lakh under Section 80C.
Note: Tax benefits are subject to change as per the prevailing laws.
Anyone who is looking forward to opening the account should meet the following criteria:
The NRIs are not permitted to open the post office time deposit account. Besides groups or funds, such as welfare funds, trust funds, regimental funds and institutional account holders as well cannot access the post office time deposit scheme.
The Finance Ministry of India reviews the rate of interest in the scheme at the commencement of each quarter of the tax year. The interest rate is determined upon the yield on the government securities and has encompassed the government segment yield.
The table below shows the interest rate that applies from January 01, 2019, to March 31, 2019:
Account Term |
Interest Rate Applicable |
01 year |
6.9% |
02 years |
6.9% |
03 years |
6.9% |
05 years |
7.7% |
The following are the important documents that need to be submitted to open the account:
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An individual can open the post office time deposit account at any of the post office in the country both offline and online. But before one opens the account online the prerequisites like an active mobile number, valid KYC documents, email id, PAN card and savings bank account needs to be met.
The individual can make contributions to the Post Office Time Deposit Account online in the following way:
The post office time deposit account allows the account holder to withdraw the funds before it matures. The applicable condition is that 06 months should have been passed right from the initial deposit to qualify for premature withdrawal. Listed below are the important terms and conditions for the premature withdrawal of the POTD:
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