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With no maximum restriction on the investment amount and high interest rates, the Post Office Time Deposit (TD) is a lucrative investment option. The eligibility requirements are simple, and you only need to submit minimal documents to park your funds in the Post Office TD scheme.


Backed by the government of India, the Post Office Time Deposit Account is among the safest investment avenues that assure high returns with flexibility. Read on to learn more about this scheme, the Post Office Term Deposit rules, and its features and benefits. 

Post Office Time Deposit Interest Rates

At the start of every quarter of a fiscal year, the Indian Finance Ministry reviews the Post Office Term Deposit interest rate. The yield on government securities is used to determine the postal term deposit interest rates, which typically have a spread over the return in the public sector.


The interest rates for a Post Office Time Deposit account for 01/07/2023 to 30/09/2023 are as follows:

Deposit Tenor

Interest Rates Applied

1 Year


2 Years


3 Years


5 Years


Disclaimer: These rates are subject to change as per the policy rates set by the concerned bodies.


You can check the previous Post Office Term Deposit rates on the official website. Remember that the interest rate is revised every quarter, and the interest payout gets disbursed annually.

Types of Accounts

You can invest in the Post Office Term Deposit scheme through 4 different accounts. The categorisation is linked to the tenor you choose. Here, you can choose an account with a tenor of 1, 2, 3, or 5 years. 


You can renew/extend your deposit within the prescribed period, and it is important to note that the longer tenor option, 5 years, has the highest rate. Additionally, from the 4 options, only the 5-year Post Office Term Deposit scheme offers you a tax benefit. 


This is applicable under section 80C of the IT Act, 1961. 

Features of the Post Office Time Deposit Scheme

The following are the features of the TD scheme by the Post Office:  

  • Earn assured returns 

  • You can easily transfer time deposit accounts from one post office to another

  • Post office term deposit schemes can have a duration of 1, 2, 3, or 5 years

  • Accounts for time deposits may be individually or jointly owned

  • You can extend the term of your TD in the post office upon maturity 

  • If an account matures and the funds are not withdrawn, the account will be renewed for the upfront payment period at the interest rates as of the maturity date

  • There is no restriction on how many time deposit accounts you can open

  • The Indian government has permitted investors to create POTD accounts at all public sector banks as well as select private banks, including Axis Bank, HDFC Bank, and ICICI Bank

  • Start with a minimal investment of ₹1000, and deposits accepted must only be in multiples of ₹100

  • Interest rates are revised every quarter, and the payment is made annually

  • Premature withdrawals allowed after 6 months

  • Transfer or pledge your TD account as a security

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Benefits of the Post Office Time Deposit

One of the major advantages of opening a Post Office Time Deposit account is that you enjoy tax benefits. Under Section 80C of the Income Tax Act, 5-Year Time Deposits are eligible for a tax deduction. 


Aside from this, you get to assign nominees for your investments. In fact, this provision is easy to opt for and makes it easy to invest in your loved ones. Additionally, the Post Office Time Deposit Scheme offers assured returns. This means that your money is secure, all through the tenor.  


With respect to earnings, the interest is calculated quarterly and paid annually. You can transfer the interest earnings to a savings account by submitting the appropriate forms. 


Best of all, you can make a premature withdrawal if needed. However, this is only possible once you complete 6 months from the date of investing. The TD post office scheme also allows you to invest freely. There is no maximum investment limit, and the investments can be made with as little as ₹1,000 and in multiples of ₹100. 


You can also open as many accounts as you wish and invest based on your goals. Lastly, since the principal invested and the interest received is covered by a sovereign guarantee, POTD is believed to be safer than FDs. 

Premature Withdrawals Under POTD Schemes

In a post office time deposit, you can withdraw money even before the tenor ends. The sole prerequisite for a premature withdrawal is that you can withdraw only after 6 months from the date of the deposit. 


Here are other important terms and conditions for premature withdrawal from a Post Office Time Deposit: 

  • If the premature withdrawal happens after 6 months but before 1 year from the date of the account opening, the interest rate applicable would be as of a PO savings account 


For premature withdrawals after 1 year, the applicable interest rate is 2% less than the interest rate corresponding to the term for which you invested.

Post Office Time Deposit vs. Other Post Office Savings Schemes

There are numerous Post Office savings schemes, and the best way to make an informed decision is to compare them. Here is a tabular overview of POTD and other Post Office savings schemes:

Scheme Name

Interest Rate


Min. Amount

Time Deposit

6.90% - 7.50%

Up to 5 years


Recurring Deposit


5 years


Monthly Income Account (MIS)


Up to 5 years




15 years




5 years


Senior Citizen Savings Scheme (SCSS)


Up to 5 years


Sukanya Samriddhi Account (SSA)


15 years


Disclaimer: The above rates and details are subject to change, and are accurate as of September 2023. 

Eligibility and Documentation Requirements

The following requirements must be met in order to open a Post Office Time Deposit account:

  • Anyone above the age of 10 is eligible to open a TD in the post office

  • Guardians can open an account on behalf of a minor or person with an unsound mind

  • After reaching the required age, the minor must submit an application to become the account's owner.

  • Deposits can be owned jointly by up to three persons at a time


You will need to submit the following documents to India Post to start a term deposit:

  • Aadhaar card or Driver’s licence 

  • Utility bills or passport

  • Voter’s ID

  • Job card 

  • Two Passport-sized photograph

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Taxation and Other Advantages of Postal Term Deposits

There is no source-tax withholding (TDS) for small savings investments at post offices. The interest on these investments is added to your total yearly income and is subject to taxation at your slab rate.


Moreover, under Section 80C of the IT Act, 5-year term deposits are eligible for tax advantages. However, the maximum deduction available is ₹1.5 Lakhs, which includes deductions from other investment avenues, such as PPF, EPF, NPF, and more.


If you are a risk-averse investor, then opening a Post Office Time Deposit account is for you. Keep in mind that the Post Office Time Deposit interest rate gets revised regularly, so invest wisely. If you want to invest in regular FDs, you can easily do so on Bajaj Markets and choose from the top issuers in India.


The information provided by BFDL herein above is related to the Non-Partnered Banks/ NBFCs and is just for the purpose of information and under no circumstances the information provided hereinabove is intended to be source of advice or recommending any financial investment advice or endorsement of any sort

The information including interest rates with regard to fixed deposit, provided on this website is gathered through publicly available sources over the internet and is considered as accurate and reliable to the best of our knowledge. BFDL disclaims any responsibility or liability regarding inaccuracies, omissions, mistakes etc. as well as offers by the Non-Partnered Banks. The use of information set out is entirely at the User’s own risk and User should exercise due care prior taking of any decision, on the basis of information mentioned hereinabove. You are advised to visit/ contact the respective Banks/ NBFCs to verify the information before making any investment or opening an account. Further, BFDL does not undertake any responsibility or liability to update this information. YOU ARE SOLELY RESPONSIBLE FOR ANY LIABILITY OR DAMAGE YOU INCUR THROUGH ACCESS TO OR USE OF THE SITE OR SUCH INFORMATION OR MATERIALS EXCEPT WHERE THE LAWS AND REGULATIONS OF A PARTICULAR JURISDICTION CONCERNING WARRANTIES CANNOT BE WAIVED. Additionally, display of any trademarks, tradenames, logo and other subject matters of intellectual property owners. Display of such Intellectual Property along with the related product information does not imply BFDL’s partnership with the owner of the Intellectual Property of such products. 

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The basic minimum amount to start a POTD is ₹1000.

Yes, you can easily transfer your term deposit to another post office in India.

Only deposits with a tenor of 5 years qualify for tax benefits.

Yes, you can prematurely withdraw your funds from POTD. However, it is possible only after 6 months from the date of booking.

The better choice between the two depends on your financial goals. Even though the National Savings Certificates (NSC) have a longer investment duration, they offer a wide range of advantages, including tax advantages. However, in contrast to NSC, which pays interest upon maturity, post office term deposits pay interest yearly. 

The highest interest rate you can earn from a post office term deposit is 7.5%. These rates are revised every quarter of a fiscal year.

There is no limit on the amount that you can deposit or invest in the POTD.

The interest in a Post Office Time Deposit is calculated every quarter but payable annually.

Yes, the interest earnings are subject to taxation as they get added to your annual income. However, there is no TDS deduction. 

Yes, this is a safe avenue because it is backed by a government sovereign guarantee.

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