Your Handy Guide to Post Office Fixed Deposit Schemes

Updated on: 24 Jan 2024 // 4 min read // #mmm news
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India Post is one of the world’s largest, most widely distributed and most efficient government-backed postal systems. Taking into consideration its wide reach, the department sought in-principle approval from the Reserve Bank of India and went ahead to introduce various savings instruments and banking features, of which the most prominent is the Post Office Fixed Deposit Scheme.

Post Office Fixed Deposit Scheme

Aimed at encouraging patrons to save their money and earn returns on it, India Post assures the highest rates offered for Fixed Deposit in India. Under the Post Office Fixed Deposit Scheme, the interest is compounded quarterly.

Deposit Amount

Right from a minimum of Rs. 200, an account holder can deposit any sum of money in their fixed deposit accounts, as long as it is in multiples of Rs. 200. 


The Post Office Deposit Account offers the much-needed flexibility to its customers when it comes to choosing the tenures. Based on their needs and preferences, account holders can invest their money in any of the tenure options ranging 1 year, 2 years, 3 years, to 5-year deposits.

Rate of Interest

The interest earned on Post Office Time Deposits varies on the basis of the chosen tenure. The table below indicates the Post Office Fixed Deposit Scheme Interest Rates 2024

Tenure of Fixed DepositPost Office FD Interest rate
1 Year7.00%
2 Years7.00%
3 Years7.00%
5 Years7.80%

Read More: Post Office Recurring Deposit – A Handy Guide

Features of Post Office Fixed Deposit Scheme

Depositors are free to open and operate any number of FD accounts in any of the post offices.

The Post Office Fixed Deposit Scheme also allows joint accounts, wherein two adults can hold the account.

The accounts can be converted from single to joint, and vice versa, as and when required.

Minors, who are 10 years or above in age, are also entitled to open and manage their Time Deposit Accounts. However, they will be required to apply for account conversion, once they turn 18. Only then, will they be able to withdraw their amount.

To be eligible for Tax Benefits under Section 80C of the Income Tax Act of India, 1961, the deposits must be made for the tenure of five years.

If needed, the Fixed Deposit Accounts can be transferred from one post office to another, without any additional charge.

When a Fixed Deposit Account matures, it is automatically renewed for the same tenure for which it was opened. In this case, the rate of interest applied is the rate offered by the Post Office on the day of maturity.

Only resident Indians are eligible to deposit money in India Post Time Deposit schemes. NRIs are not eligible to open accounts under this scheme.

The depositor can open the account with cash or cheque. If a cheque is submitted towards this purpose, the date of realisation of the cheque is considered as the date of opening the Time Deposit Account.

Benefits of Post Office Time Deposits

While there are numerous Fixed Deposit schemes offered by the public as well as private banks, a large majority of individuals still prefer POTD owing to the fact that this scheme offers some incredible benefits, including –

Guaranteed Returns

The POTD is a government-backed scheme and is therefore completely safe. Moreover, it entails guaranteed returns on the investment.

Protection Against Inflation

In case the inflation rate falls below the Fixed Deposit Interest Rates, the interest rate stays unaffected, thus ensuring that the depositor earns greater returns.

Higher Rate of Interest

Post Office Time Deposits provide a higher rate of interest when compared to other Fixed Deposit schemes offered by various private and public banks.


While Post office Time Deposits have a deposit lock-in period, however in case of emergencies, the account holder can withdraw the amount prematurely. Besides, the account holder can also procure a loan, by offering the POTD as collateral.


Regardless of the market fluctuations, the funds once invested offer complete returns on maturity.

Tax Implications

Depositors can claim tax benefits of up to Rs. 1.5 lakh under the Section 80C of the Income Tax Act of India, 1961, the deposits must be made for the tenure of five years.

How to Open a Post Office Time Deposit Account?

You can open one or more POTD accounts at any Head Post Office or General Post Office across India. As and when required, you can shift your account from one branch or city to the other, making it exceedingly convenient for you to maintain your account, even when you are required to transfer your residence from one place to another.

Documents Required to open a Post Office Time Deposit Account

The following documents are generally needed when you wish to open a new POTD at any of the Head or General Post Office across India –

Address and Identity Proof

This can be offered in the form of Passport, Driving License, Voter ID Card, Aadhaar Card, Ration Card, or PAN Card. Alternatively, you can also submit the income tax declaration form 60 or 61 as per the Income Tax Act, 1961.

Process to Open a Post Office Time Deposit Account

Here is the step by step process to open a POTD –

Step 1 – Fill in the POTD opening form provided at the Post Office.

Step 2 – Self-attest the copy of the proof provided for verification.

Step 3 – Choose a nominee, who according to you should be able to withdraw the TD amount, in the unfortunate case of your death.

Step 4 – Show your original identity proof for verification at the time of opening the account.

Step 5 – Get the signature of a witness to complete the formalities and start the deposit.

This is all you need to know about the highly sought after Post Office Fixed Deposit Account. Happy investing!

Also Read: Top 10 Tax Saving Investment Options in India

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