Post Office Time Deposit Scheme 2024: Interest Rate, Eligibility, Benefits & Features

Post Office Time Deposit Scheme: The Post Office Time Deposit Account is a well-known investing program provided by the Indian Post. This program is more popular in the nation’s remote and rural areas and is available to all. Get all the information you need about the Post Office Time Deposit Scheme by reading this post, which includes information on its features, benefits, interest rates, eligibility requirements, required documents, benefits from taxation under POTD, premature withdrawal of POTD funds, and much more.

Post Office Time Deposit Scheme

Post Office Time Deposit Scheme 2024

The Post Office Time Deposit Account is among India Post’s most well-known investment offerings (POTD). There is no investment cap on the POTD Account. It is also possible to multiply investments by multiples of Rs 100. The Indian Finance Ministry reviews the interest rates on the scheme at the beginning of each fiscal quarter. The interest rate, which usually has a spread over the yield in the government sector, is determined by the yield on government securities.

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Benefits Of Post Office Time Deposit Scheme 2024

The benefits of this scheme are given below:-

  • A guaranteed rate of return is provided by the POTD Scheme.
  • Even children ten years old and up are capable of handling the account on their own.
  • Five-year time deposits are eligible for tax deductions under Section 80C of the Income Tax Act.
  • The minimum investment amount is Rs. 200, and there is no maximum amount allowed.
  • A nomination facility is available.
  • Deposits can be taken out early, and accounts can be easily moved between post offices.
  • The number of accounts that can be opened at a single post office is unlimited.
  • POTD investments are regarded as safer than FDs since both the principal invested and the interest received are guaranteed by the state.

Features Of Post Office Time Deposit Scheme

The following are some of the Post Office Time Deposit Scheme’s salient characteristics:

  • Under the POTD schemes, a single deposit may be made into a single account, with a deposit tenure of one, two, three, or five years.
  • It is straightforward to move time deposit accounts between post offices.
  • Investors are guaranteed returns on their investment through this post office program.
  • Account holders can choose to extend the term of a time deposit account after it matures.
  • Time deposit accounts may be owned jointly or individually.
  • If the proceeds from a mature account are not withdrawn, the account will automatically renew for the duration of the initial deposit at the applicable interest rates as of the maturity date.
  • The Central Government has recently authorized all public sector banks and many private institutions, such as ICICI Bank, Axis Bank, and HDFC Bank, to allow investors to open POTD accounts.
  • The number of time deposit accounts that can be opened is unlimited.
  • POTD investments may be preferred by investors over bank fixed deposits.
  • A minimum deposit of 200 rupees is required for the Post Office Time Deposit program. Note that the amount to be entered must only be in multiples of 200. If not, the account will hold the amount in multiples of 200, and the remaining balance will be repaid interest-free.

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PODT Scheme Interest Rates

The Indian Finance Ministry assesses the post office FD interest rates at the start of each quarter of the tax year. The interest rate is determined by taking the yield on government securities, which takes into account the yield for the government section. The following table displays the interest rate that will be in force from January 1 through March 31, 2019:

Account TermInterest Rate Applicable
01 years6.9 percent
02 years6.9 percent
03 years6.9 percentage
05 years7.7 percentage

Eligibility Criteria

The following eligibility requirements must be met by applicants wishing to apply for the Post Office Time Deposit Scheme:

  • One account may be opened by any Indian national.
  • A minor who is ten years of age or older can manage the account in addition to opening it.
  • The individual may open a joint account with up to three adults.
  • On behalf of the minor, an account may also be opened by a parent or legal guardian.
  • When an account holder lacks capacity, their guardian may open the account on their behalf.
  • The POTD program is not available to organizations or funds such as welfare funds, trust funds, regimental funds, or holders of institutional accounts.
  • NRIs are not permitted to open a time deposit account at the post office.

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Required Documents

The following are some of the crucial documents needed for the POTD Scheme:

  • Passport-size photos
  • Completed the Post Office Time Deposit Scheme application.
  • Proof of Identity such as a driver’s license, Aadhar card, PAN card, or voter ID; Proof of Address such as a ration card, voter ID, PAN card, or Aadhar card.
  • Evidence of income such as pay stubs from the previous three months or bank account statements from the previous six months.

POTD Scheme Taxation Benefits

Post offices do not offer tax deductions at source (TDS) for modest savings investments. It is crucial to remember that the interest earned on these investments is taxed at the investor’s marginal tax rate and is added to the depositor’s annual income in the year of receipt. Nonetheless, deposits made for the five-year term are eligible for tax benefits under Section 80C of the Income Tax Act. Post offices do not offer tax deductions at source (TDS) for modest savings investments. It is crucial to remember that the interest earned on these investments is taxed at the investor’s marginal tax rate and is added to the depositor’s annual income in the year of receipt.

Post Office Time Deposit Funds Premature Withdrawal

Post Office Time Deposit Account owners are permitted to take withdrawals before the account matures. The only requirement to be eligible for an early withdrawal is that six months must pass from the date of the initial deposit. The following are crucial terms and conditions that must be met if a time deposit is withdrawn early.-

  • If a premature withdrawal of 1/2/3 or 5-year POTD is made after the completion of 6 months but before the completion of 1 year from the date. The deposit account was opened, and simple interest is paid under the Post Office Savings Account interest rate.
  • If a 1/2/3 or 5-year TD account is prematurely closed after a year from the date of account opening. The applicable interest rate is 1% less than the interest rate that reflects the original tenure booked for the account.

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