India Post or Department of Posts offers term deposits (TDs) under its banking products. These term deposits, also known as fixed deposits (FDs), require investors to deposit a lump sum of money for a specific period and avail of features like choice of interest payout.
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Post office time deposit account can be opened by an individual by cash or cheque. In case of a cheque, the date of realisation of cheque in government's account shall be the date of opening of account.
Here are key things to know about post office time deposit account:
In case of post office TD account, the minimum amount required to open the account is Rs 200. There are no maximum limit on investments.
Interest rate on the time deposit account is payable annually but calculated quarterly. This account offers four maturities: one year, two years, three years, and five years.
The following FD interest rates are applicable on deposits:
| Period | Interest rate |
| 1yr.A/c | 5.50% |
| 2yr.A/c | 5.50% |
| 3yr.A/c | 5.5% |
| 5yr.A/c | 6.7 % |
No additional interest is payable on the amount of interest that has become due for payment but not withdrawn by the account holder, according to India Post.
Premature encashment is not allowed before expiry of 6 months. If closed between 6 month to 12 months from date of opening, post office saving accounts interest rate is payable.
Additionally, the investment under 5 years time deposit qualifies for the benefit of Section 80C of the Income Tax Act, 1961.
Post office FD or TD account also offers account transfer and nomination facility. Nomination facility is available at the time of opening and also after opening of account.
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