Post Office Time Deposit Scheme is a best scheme. By investing in this scheme, you can get more interest than the FD of banks.
The Reserve Bank of India (RBI) has cut the repo rate for the third consecutive time in the month of June. With this cut, there has been a big reduction of 1% in the repo rate. Since the reduction in repo rate, banks have reduced interest on loans and FDs. While on one hand the EMI of the loan has reduced, on the other hand the return on FD has also decreased. Senior citizens have suffered the most due to the reduction in interest on FD. In such a situation, if you are also troubled by the low interest on FD, then there is no need to take tension. We are telling you about a great saving scheme of Post Office. The name of that scheme is Post Office Time Deposit (TD). By investing in this scheme, you can get more interest than bank FD. Let’s know about this special scheme.
What is Post Office Time Deposit (TD) Scheme?
This is a fixed deposit scheme run by the post office. In this, you can invest for 1,2,3 and 5 years. This scheme is backed by the government, so it is completely safe and reliable.
Interest rates on Post Office Time Deposit Scheme
| Duration | interest rate |
| 1 year | 6.9% per annum |
| 2 years | 7.0% per annum |
| 3 years | 7.1% per annum |
| 5 year | 7.5% p.a. (Tax exemption under 80C) |
Who can invest?
Any adult citizen of the country can invest in this scheme. At the same time, 3 adults can invest together by opening a joint account. Parents can invest in this investment scheme in the name of their children.
How much can you start investing?
You can start investing in this saving scheme from ₹ 1000. You can increase the amount as much as you want in its multiples. There is no maximum investment limit. Interest is paid annually. Investing on 5-year TD gives tax exemption under Section 80C of the Income Tax Act.
The account can be extended within the stipulated time from the date of maturity:
- 1 year TD: in 6 months
- 2 year TD: in 12 months
- 3 and 5 year TD: in 18 months
Extension can be requested at the time of opening the account itself. For extension, the application form and passbook will have to be submitted to the concerned post office. The original interest rate which was applicable on the date of maturity will be applicable for the extension period.
Premature Withdrawal
Withdrawal cannot be made before 6 months from the date of opening the account. If the account is closed between 6 months to 1 year, the Post Office Savings Account interest rate is applicable.
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