The Post Office National Savings Time Deposit (PONSTD) is a government-backed scheme providing assured returns over fixed tenures from 1 to 5 years. The interest rates, currently between 6.90% and 7.50% p.a., are notified by the Ministry of Finance and revised every quarter.
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What is the Post Office National Savings Time Deposit Scheme?
The Post Office National Savings Time Deposit is a fixed-term investment where depositors deposit a lump sum for a predefined period. It can be opened individually or jointly by up to three investors, making it flexible for families. Accounts can be opened individually or jointly (up to three holders). Guardians can open accounts for minors, while minors aged 10 years and above can operate the Post Office savings account in their own name. Plus, there is no cap on the number of accounts customers can open, offering added convenience for different savings goals.
Key Features of Post Office National Savings Time Deposit Scheme
Here are the key features and important details of the Post Office National Savings Time Deposit:
Multiple Lock-in Periods: Depositors can choose tenures of 1, 2, 3, or 5 years, with the option to extend the account by submitting a formal request.
Interest Credit to Linked Accounts: Interest from a Post Office Time Deposit can be credited directly to a linked Post Office Savings Account (POSA) on request.
Payment of Interest and Principal: Interest is calculated quarterly and credited annually. The principal is repaid at maturity, with payouts above ₹20,000 made digitally. Unclaimed maturity proceeds may earn Savings Account interest in CBS accounts; otherwise, no further interest is paid.
Applicability of Interest Post Maturity: If a core banking account’s principal isn’t withdrawn at maturity, it earns POSA-rate interest, with extensions requiring timely opt-in.
Low Minimum Deposit Amount: The minimum deposit is ₹1,000 in multiples of ₹100, with no upper limit, payable via cash or cheque.
Categories of Post Office National Savings Time Deposit Accounts
The Post Office National Savings Time Deposit scheme offers customers four account choices with maturities of 1 year, 2 years, 3 years, and 5 years. Each option has its own interest rate and premature closure rules, so depositors can pick the one that best fits their financial plans. Here are the key details:
Tenure
Interest Rate (% p.a.)
Premature Closure Rules
1 Year
6.90
Allowed only after 6 months. If closed between 6–12 months, interest at the Post Office Savings Account (POSA) rate.
2 Years
7.00
If closed between 6–12 months, interest at Savings Account rate. If closed after 1 year but before maturity, interest at 2% lower than TD rate for completed years; Savings Account rate for incomplete year.
3 Years
7.10
Same as the 2-year rule: 6–12 months, interest at Savings Account rate; after 1 year, 2% lower than TD rate for completed years; Savings Account rate for incomplete year.
5 Years
7.50
Cannot be closed before 4 years. If closed after 4 years but before maturity, interest at Savings Account rate only.
Extension of Post Office National Savings Time Deposit Scheme
The Post Office Time Deposit (TD) account offers the option to extend your deposit after maturity, subject to specific rules and timelines:
Extension Option: On maturity, the depositor can extend the TD account for the same tenure as initially opened.
Extension Periods: Extensions must be requested within the prescribed period: 1-year TD within 6 months, 2-year TD within 12 months, 3/5-year TD within 18 months.
Advance Request: Depositors can submit a request for extension at the time of account opening, effective from the maturity date.
Limit on Extensions: As per Department of Posts rules, an account may generally be extended once at maturity for the same tenure, provided the request is made within the prescribed period. Rules are subject to change through government notifications.
Applicable Interest Rate: The interest rate on the maturity date will apply to the extended tenure of the account.
How to Apply for the Post Office National Savings Time Deposit Scheme?
You can open a Post Office National Savings Time Deposit (PONSTD) account either online or offline by following these steps:
Online Application Process
To open a Post Office National Savings Time Deposit (PONSTD) account online, follow these step-by-step instructions:
Log in to eBanking Portal: Visit the Indian Post eBanking website and log in using your registered User ID.
Enter the Captcha for Security: Input the captcha code correctly to access your Dashboard.
Go to the Service Request Section: from the menu, select ‘Service Request’ and then ‘ General Services’.
Select Time Deposit Option: Choose the option to open a National Savings Time Deposit (TD) account.
Provide Account & Deposit Details: Enter the amount you want to deposit, select the tenure (1, 2, 3, or 5 years), and confirm the debit account.
Confirm & Submit Application: Verify all details, then apply. You will receive a confirmation message and reference number.
Note: The online facility is available only if you can access DoP internet banking and your account is linked with a CBS-enabled Post Office.
Offline Application Process
To open a Post Office National Savings Time Deposit (PONSTD) account Offline, follow these simple steps:
Visit the Nearest Post Office: Go to a CBS-enabled post office branch.
Request Application Form: Ask for the National Savings Time Deposit (TD) account opening form.
Fill the Form Accurately: Provide personal details, nominee details, deposit tenure, and deposit amount.
Submit KYC Documents: Attach valid identity proof (Aadhaar, PAN, Voter ID, etc.) and address proof as per India Post requirements.
Make the Deposit: Deposit a minimum of ₹1,000 (in multiples of ₹100). You can pay in cash (up to ₹20,000) or by cheque.
Get Account Passbook/Receipt: Once your application is processed, you will receive a passbook or account receipt confirming your Time Deposit account details.
Who Should Invest in the Post Office National Savings Time Deposit Scheme?
The Post Office National Savings Time Deposit scheme is designed to cater to different investor needs, offering security, steady returns, and flexible tenures:
Senior Citizens: Ideal for those seeking steady returns with low market exposure
Parents/Guardians: Planning long-term savings for children via minor accounts.
Goal-Oriented Savers: Saving for medium-term financial needs like weddings, vacations, or large purchases.
PONSTD vs Other Post Office Saving Schemes
Here’s a quick comparison of the Post Office National Savings Time Deposit with other popular post office savings schemes to help you evaluate which option aligns best with your financial goals:
Product
Rate of Interest (% p.a.)
Tenure
Premature Withdrawal
Income Tax Benefits (Under Section 80C)
Time Deposit
6.90 - 7.50
1 to 5 years
Allowed after 6 months, before 1 year
Only on the 5-year deposit
Recurring Deposit
6.70
5 years
Permitted after 3 years
No
Monthly Income Scheme (MIS)
7.40
5 years
Allowed after 1 year; different rules before and after 3 years
Only on the death of the holder or as per court order
Yes
Post Office National Savings Time Deposit Scheme Tax Implications
The 5-year Post Office Time Deposit qualifies for tax deductions under Section 80C of the Income Tax Act, 1961, allowing investors to claim up to ₹1.5 lakh per financial year on the amount deposited. However, deposits with shorter tenures of 1, 2, or 3 years do not provide any tax benefit. It is also important to note that the interest earned on all deposits, including the 5-year option, is fully taxable as per the depositor’s income tax slab. TDS may apply under Section 194A if annual interest exceeds the prescribed threshold (₹50,000 for general investors; ₹1,00,000 for senior citizens).
Key Takeaways
The Post Office National Savings Time Deposit (PONSTD) is a government-backed investment that offers guaranteed returns and flexible tenures of 1, 2, 3, or 5 years. Interest rates range from 6.90% to 7.50% and are revised quarterly based on government securities. Investors can open single, joint, or minor accounts with a minimum deposit of ₹1,000 and no maximum limit. Only the 5-year deposit qualifies for Section 80C tax benefits, while premature withdrawals are permitted after six months under specific conditions. Applications can be made online through the India Post eBanking portal or offline at any post office, making PONSTD a secure and easily accessible savings option.
FAQs
What is the Post Office Time Deposit savings scheme?
The Post Office Time Deposit is a government-backed investment where you deposit a lump sum for 1, 2, 3, or 5 years at a fixed interest rate. Interest is calculated quarterly and paid annually, offering guaranteed returns with minimal risk.
Is a Post Office Time Deposit better than a bank Fixed Deposit (FD)?
POTD offers comparable or slightly higher interest rates than many bank FDs and is backed by the Government of India, making it equally secure. However, bank FDs may offer flexibility, such as monthly interest payouts and online management.
Can I double my money in 5 years in the Post Office Time Deposit?
No. The current 5-year POTD interest rate is about 7.50% per annum. At this rate, your money would take around 9–10 years to double, not 5.
Is the Post Office Time Deposit safe?
Yes. The Government of India fully backs the Post Office Time Deposit, involves no market risk, and guarantees both the principal and the interest.
Which Post Office scheme is best?
The best scheme depends on your goals. The 5-year Time Deposit, Public Provident Fund (PPF), and Senior Citizen Savings Scheme are strong options for tax savings. PPF or Sukanya Samriddhi may better suit higher returns with long tenure, while POTD is ideal for short-to-medium-term fixed returns.
˜Top plans are based on annualized premium, for bookings made through https://www.policybazaar.com in FY 25. Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. For a complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website, www.irdai.gov.in
Disclaimer: #The investment risk in the portfolio is borne by the policyholder. Life insurance is available in this product. The maturity amount of Rs 1 Cr. is for a 30 year old healthy individual investing Rs 10,000/- per month for 30 years, with assumed rates of returns @ 8% p.a. that is not guaranteed and is not the upper or lower limits as the value of your policy depends on a number of factors including future investment performance. In Unit Linked Insurance Plans, the investment risk in the investment portfolio is borne by the policyholder and the returns are not guaranteed. Maturity Value: ₹1,05,02,174 @ CAGR 8%; ₹50,45,591 @ CAGR 4%. *Tax benefits and savings are subject to changes in tax laws. All plans listed here are of insurance companies’ funds.
Past 10 Years' annualised returns as on 01-10-2025
^The tax benefits under Section 80C allow a deduction of up to ₹1.5 lakhs from the taxable income per year and 10(10D) tax benefits are for investments made up to ₹2.5 Lakhs/ year for policies bought after 1 Feb 2021. Tax benefits and savings are subject to changes in tax laws.
*All savings are provided by the insurer as per the IRDAI approved insurance plan.
Tax benefit is subject to changes in tax laws. Standard T&C Apply
++Source - Google Review Rating available on:- http://bit.ly/3J20bXZ
^^The information relating to mutual funds presented in this article is for educational purpose only and is not meant for sale. Investment is subject to market risks and the risk is borne by the investor. Please consult your financial advisor before planning your investments.
¶Long-term capital gains (LTCG) tax (12.5%) is exempted on annual premiums up to 2.5 lacs.
**Returns are based on past 10 years’ fund performance data (Fund Data Source: Value Research).
Generate wealth Earn 1 Cr# in maturity with Zero LTCG tax¶
Double tax savings^ On premiums (under 80C) and on maturity (under 10(10D))
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