Estimate Your TD Returns
Important: Interest rates are set by the government and can change. The rate is fixed for you at the time of deposit. Always check the official website for the latest rates.
Your TD Investment Summary
All About the Post Office Time Deposit (TD)
The Post Office Time Deposit is just like a Fixed Deposit (FD) that you open in a bank. You deposit a lump sum amount for a fixed period and get a guaranteed interest on it. It's a very safe and reliable investment option for people who do not want to take any risks with their money. The Post Office offers TDs for different tenures—1 year, 2 years, 3 years, and 5 years—each with its own interest rate.
Key Highlights: Why Choose a Post Office TD?
- Guaranteed Returns: The interest rate you get at the time of opening the account is locked in for the entire period.
- Complete Safety: Your investment is backed by the Government of India, making it 100% secure.
- Choice of Tenure: You can choose from 1, 2, 3, or 5-year options based on your financial goals.
- Tax Benefit on 5-Year TD: The 5-year Time Deposit offers a special tax deduction under Section 80C.
- Easy to Open: You can open an account at any Post Office with a simple process.
- Account can be Extended: You can extend your TD account after it matures.
Who is Eligible to Open a TD Account?
- Any single adult Indian resident.
- A joint account for up to 3 adults.
- A guardian on behalf of a minor child.
- A minor who is 10 years or older can open an account in their own name.
Investment Rules and Limits
- Minimum Investment: You can start with a minimum of ₹1,000.
- No Maximum Limit: There is no upper cap on how much you can invest in a Time Deposit.
- Multiples of ₹100: Any investment must be in multiples of ₹100.
How Interest is Calculated and Paid (Very Important!)
This is where a TD is slightly different from other schemes. The interest on your deposit is calculated for every quarter (every 3 months), but it is paid out to you annually (once a year). It is not added back to your principal amount. You can choose to have this annual interest credited directly to your Post Office Savings Account.
Can You Break a TD Early? (Premature Withdrawal Rules)
Yes, you can close your TD account before its maturity date, but there are some conditions and penalties.
- You cannot close a TD account before 6 months from the date of deposit.
- If you close a 2, 3, or 5-year TD account after 1 year, the interest paid will be 2% less than the rate for the completed years. For example, if you break a 3-year TD after 2 years, you will get the interest rate for a 2-year TD minus 2%.
- If you close any TD account after 6 months but before 1 year, you will only get the interest rate applicable to a Post Office Savings Account.
The Special Tax Benefit of the 5-Year Time Deposit
This is a key feature that makes the 5-Year TD very attractive.
- Section 80C Benefit: If you invest in a 5-Year Post Office Time Deposit, your investment amount (up to ₹1.5 lakh in a financial year) is eligible for a tax deduction under Section 80C of the Income Tax Act.
- No Benefit for Other Tenures: The 1-year, 2-year, and 3-year Time Deposits do NOT offer this tax benefit.
- Interest is Always Taxable: Regardless of the tenure, the annual interest you earn from your TD is added to your income and is fully taxable as per your income tax slab.
- TDS Rules: If the total interest you earn from Post Office schemes exceeds ₹40,000 in a year (₹50,000 for senior citizens), TDS will be deducted. You can submit Form 15G/15H to avoid this if your income is below the taxable limit.