Post Office Fixed Deposit/ Time Deposit (POFD) Scheme is similar to a bank fixed deposit, where you can deposit money for a fixed time period and earn a guaranteed return on that. This is a good investment option for those who want to deposit a lump sum for a fixed tenure. You will get the deposited amount along with the interest earned on it at the time of maturity.
In rural and suburban areas, Post Office FD schemes are more preferred compared to Bank FDs. You have the option to choose from a 1, 2, 3, and 5 year post office time deposit account. The interest rates are different for the different term period, whereas, five year FD being the highest.
In this article I will discuss about everything about Post Office FD like:
- Post Office FD Rates
- Where Can You Open an Account
- How to Open FD in Post Office
- Important Features
- Online Payment Rules
- Minimum and Maximum Deposit Limit
Post Office FD Rates 2021
One year TD yields an interest rate of 5.5% per annum. You can see the below table to find the post office FD interest rates 2021 for different tenures.
|1 yr. A/c||5.5%|
|2 yr. A/c||5.5%|
|3 yr. A/c||5.5%|
|5 yr. A/c||6.7%|
The fixed deposit rates in post office are decided periodically. Therefore, make sure to check the current post office fixed deposit interest rate, before opening an account.
Where Can You Open an Account?
You can open the account in any of your nearest/ preferred post office.
Documents Required for Post Office Fixed Deposit
The needed documents for opening an account are:
- An account opening form from your nearest post office
- Two passport size photographs
- Address and identity proof such as the Aadhaar card, passport, driving license, voter ID card, ration card, PAN card or declaration in Form 60 or 61 as per the Income Tax Act, 1961
How to Open FD in Post Office?
First of all, collect all the documents mentioned above.
Fill up the form carefully while providing the nominee details. Also, carry the original identity proof for verification at the time of account opening. Finally, you just need to get a witness signature and complete the procedure to get started.
Post Office Fixed Deposit Features
- Any individual can open a Time Deposit Account.
- You can open any number of accounts in any post office.
- One can open an account by cash/ cheque. In the case of a cheque, the date of realization of the cheque will be considered as the date of opening of the account.
- Nomination facility is available at the time of opening and also after opening of the account.
- You can transfer an account from one post office to another if you wish to do so.
- Two adults can open a Joint account.
- You have the option to convert your Single account into a Joint and Vice Versa.
- One can open an account in the name of a minor, and a minor of 10 years and above can open and operate the account.
- After attaining majority, the minor account holder needs to apply for conversion of the account in his/ her name.
- One can get the tax benefit on the investment under 5 year post office time deposit account under Section 80C of the Income Tax Act, 1961.
- In CBS (Core Banking Solution) Post offices FD account will be automatically renewed on maturity for the period for which the account was initially opened. The interest rate applicable on the day of maturity will be applied here.
Post Office Fixed Deposit Tax Benefit
You can get tax exemption on an FD account with India Post. However, only 5 years’ plan can get the benefit. Tax exemption is possible along with all the savings investments that are eligible for tax deduction under Section 80C of the Income Tax Act of 1961. The maximum taxable deduction can be Rs. 1,50,000.
Minimum and Maximum Deposit in Post Office FD Account
You can open a time deposit account at any post office with a minimum deposit of Rs. 200.
No such maximum limit is specified, as of now.
Post Office Fixed Deposit Online Payment Facility
This facility is currently available for Post Office Recurring Deposit through Electronic Clearing Service (ECS). Also, if you have an agent, he or she can use the post office agent portal and do the online payment for you. Information on Post office FD online payment is not yet clear. However, you can ask your post office branch for exact details on this. Furthermore, you may also ask your agent for the availability of an online payment mode.
Post Office FD Form
You can download post office account opening form from here.
FAQs on Post Office FD
Can I open post office fixed deposit scheme online?
No, this facility is not yet available. Therefore, you need to open an account in the post office itself.
What is the maturity value of post office fixed deposit?
There are 4 different fixed tenure options of one, two, three, and five years. You can use the post office FD calculator to calculate the maturity amount by providing the time period and fixed deposit amount.
Is post office TD premature withdrawal possible?
Premature withdrawal is allowed only after 6 months. In case it is withdrawn after 6 months but before the completion of one year, then simple interest applicable to the post office savings account will be payable.
In case of 2, 3 and 5 years of time deposits, if you withdraw the amount after one year but before maturity then the payable interest will be lesser than the specified rate of interest for the respective term deposits.
What is the tenure of post office fixed deposit premature closure?
Premature closure of FD is permissible only after completing first six months. And the interest rate applicable will be fixed as above.
Hope you will find the article useful. Please feel free to share your queries and experiences, if any. Also, don’t forget to share this article with your friends who might want to open an account under the Post Office Fixed Deposit scheme.