Post Office Savings Scheme: Fixed Deposits have a different kind of relationships with the middle class and senior citizens in India. For the longest of times, fixed deposits have been the go-to option of investment for the Indian middle class.
For the average middle class citizen in India, investing in good schemes with fixed and good rates of interest remains among the topmost priorities. Despite being a low-return financial investment tool, FDs are preferred to other options because of their risk-free nature. They come with options of investing money for both short term and long term depending upon the customers’ needs and requirements.
Apart from banks, FD schemes are also provided by the Post Office which in some cases offer better interest rates than leading lenders. The rates are revised quarterly depending upon the market situation and government policies.
Post Office Saving Schemes are investment instruments that are higher-yielding when compared to fixed deposits. While fixed deposits are backed by the banks, the rate of interest and benefits in tax is not as high as Post Office Saving Schemes.
The post office offers an array of savings schemes that are beneficial for the middle class Indian household. The National Savings Time Deposit Account (TD) is one among them. The Post Office fixed deposit also offers various benefits, apart from guarantees from the government, as well as higher interest rates than that of banks.
Post Office FD Features
A post office FD account can be opened with a minimum amount of Rs 1,000 and in multiples of Rs 100. There is no maximum limit for investment in these accounts.
The interest in this case will be payable annually, the Post Office says in its website. “No additional interest shall be payable on the amount of interest that has become due for payment but not withdrawn by the account holder,” according to the India Post website. However, this interest will be compounded quarterly.
Post Office FD Interest Rate
While usually the post office FD rates are supposed to be revised every quarter, they have remained unchanged since April 1, 2020. Starting with interest offerings of 5.5 per cent for one year FD scheme, the rate of return on post office fixed deposits go up to 6.7 per cent.
India Post FD rate for 1 year -5.5 per cent
India Post FD rate for 2 year -5.5 per cent
India Post FD rate for 3 year -5.5 per cent
India Post FD rate for 5 year -6.7 per cent
Maturity of Post Office FD
Deposit amount will be repayable after expiry of one year, two year, three year, or five year (as the case may be) from the date of opening. The investment under five year TD qualifies for the benefit of section 80C of Income Tax Act, 1961.
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