The Government of India’s Department of Posts, Ministry of Communications, offers fixed deposit accounts that oiler attractive interest rates with tenures that range from 1 year up to 5 years. The interest is payable annually with the minimum deposit being Rs.1,000 and no maximum limit.
|Deposit Tenure||Post Office FD Rates (P.a.)|
The post office Time Deposit (TD) Account, also known as the post office Fixed Deposit (FD) account, can be opened with a minimum of Rs. 1,000 in multiples of Rs. 100, with no maximum limit.
- Account can be transferred from one post office to another anywhere in the country.
- Any number of accounts can be opened in any post office anywhere in the country.
- A single account can be converted into a joint account and vice versa.
- Nomination facility is available at the time of opening the account and afterwards too.
- Account can be opened by cheque or cash.
- Minimum amount is Rs. 1,000.
- There is no maximum limit to the deposit.
- A minor’s account has to be convened after attaining majority.
- The tenure can he extended by making an application.
- Interest is payable annually.
- Interest is credited into the holder’s savings account.
A Lime deposit account with India Post can he opened by:
- A single adult
- Maximum of three adults (in the case of a joint account)
- A minor who is above 10 years of age
- A guardian on behalf of an individual who is a minor or a person of unsound mind
Premature withdrawal of a Post Office FD or Term Deposit can be made between 6 months to 1 year of the date of opening the account. However, if withdrawal is not allowed before 6 months from the date of opening the account.
You can avail a tax deduction under Section 80C of the Income-tax Act, 1961. for deposits with a tenure of 5 years. This rule is applicable from 1 April 2007.
If you open a fixed deposit with the post office for a tenure of 5 years. you will be eligible to claim tax benefits under Section 80C of the Income-tax Act., 1961.