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Post Office Time Deposit Scheme

The Post-Office Term Deposit (POTD) Scheme is an investment savings account scheme offered by the India Post (Department of Posts). This scheme is meant for those depositors who want to deposit a lump sum of money for a fixed five-year tax-saving fixed deposits. In this article, we look at the Post Office Time Deposit Scheme in detail.

To know more about the Post Office Recurring Deposit Scheme

Eligibility Criteria

The Post-Office Time Deposit (POTD) Account Scheme can be opened by any person who satisfies the below criteria.

• Any Indian who is over 18 years of age.
• Two persons jointly (Minors of age over 10 years and above can open the account jointly with their guardian)
• Parent or guardian can open this Time Deposit account on behalf of a minor.

Note:

• Group Accounts, Institutional Accounts and Miscellaneous account not permissible.
• Trust, Regimental Fund or Welfare Fund not permissible to invest.

Features of the Post-Office Term Deposit Scheme

The below listed are the main features of the Term Deposit Account by the India Post.

• The Term Deposit account can be opened by cash as well as the cheque. In case of cheque, the date on which the amount deposited would be the date of the presentation of the cheque.
• The account’s maturity period shall be of 5 years and can also be extended for the next years on year to year basis.
• This five-year Post-Office Term Deposit Scheme also offers with return on investment and tax deduction.
• After completing majority, the minor who opened the account has to apply for the change of the account on his name.
• A single account can be changed into a joint account and vice versa.
• Nomination facility is also available that the account holder can nominate during the account opening or even after the opening of the time deposit account at the ease.
• The depositor can get the tax benefit on the investment made for 5 years scheme under section 80C.
• Fixed Deposit account will be automatically renewed after attaining maturity period.
• One can get capital protection under the post office time the Indian Government backs deposit scheme.
• It offers guaranteed return charged at the time of opening account.
• It offers liquidity as the cash can be withdrawn at any time. The money can also be borrowed against this time deposit.

Post Office Time Deposit Interest Rates

The interest rate provided would be of 7.4% on Time Deposit  Account of a post office for 5 years. Kindly refer the below table to know about current interest rate applicable to post office fixed deposit.

Period	Rate
1 Year Account	7.00%
2 Year Account	7.00%
3 Year Account	7.00%
5 Year Account	7.80%

The fixed deposit rates mentioned in the post office are variable and changes from time to time. Hence, make sure to check the current post office fixed deposit interest rate, before opening an account. The above interest rates are reviewed every quarter by the Finance Ministry.

Post Office Time Deposit – Tax Benefits

The tax benefit is not applicable for small tenure. The tax benefit can be obtained only if the time deposit account scheme is opened for 5 years. The tax exemption benefit is provided under section 80C of the Income Tax Act. The maximum limit applicable is Rs. 1.5 Lakhs for the tax benefit.

Procedure to open Post Office Time Deposit

To open a Post Office Time Deposit Account, the depositor has to follow the below procedures.

Approach a Post Office

Step 1: First the applicant must decide the Post Office where they want to open the account.

Get Application Form

Step 2: Then get the required application form from the relevant post office that has chosen and have to fill out the post office time deposit application form in a prescribed format.

Note: The user may also download the Post Office Time Deposit Account Opening Form online.

Fill in the Right Credentials

Step 3: Fill the Post Office Time Deposit Account Opening application form with appropriate details without making any mistakes. Then provide the given following details in the application form.

• Applicant’s Name
• Residential Address
• Applicant’s Date of Birth
• Detail of Know Your Customer (KYC)
• Nomination Details
• Details of First deposit
• Aadhaar card number

Step 4: Submit the time deposit account application form application form in the prescribed format to the relevant official along with all the supporting documents/ certificates.

Attach Required Documents

Step 5: After completing, attach the PAN Card, Address Proof, and all the ID proof records along with the application form. And carry the originals documents for the in-person KYC verification purpose.

Submit the Application

Step 6: After completing the application form, submit the same and start operating the account.

Post Office Time Deposit – Withdrawal Rule

The early closure of fixed deposit is allowed. However, there are certain specific conditions. The account can not be withdrawn early only after 6 months of the deposit.

If the account is withdrawn early after 6 months but before the expiry of one year from the date of the amount deposited, simple interest at the applicable rate to Post Office Saving Account from time to time would be payable.