Post Office Time deposit scheme

Post Office Time deposit scheme:

Under a time deposit scheme, a term deposit is opened for five years with a minimum amount of Rs 200. The rate of interest offered is 8.2 per cent for the first year, which increases to 8.4 per cent in the fifth year. The investment for five years qualifies as a deduction under Section 80C of the IT Act subject to a maximum of Rs 1,00,000. The investment is not chargeable to wealth tax.

Time Deposit Account

  • Any individual (a single adult or two adults jointly) can open an account.
  • Group Accounts, Institutional Accounts and Misc. account not permissible.
  • Trust, Regimental Fund or Welfare Fund not permissible to invest.
  • 1 Year, 2 Year, 3 Year and 5 Year Time Deposit can be opened.
  • In case of premature closure of 1 year, 2 Year, 3 Year or 5 Year account on or after 01.12.2011, if the deposit is withdrawn after 6 months but before the expiry of one year from the date of deposit, simple interest at the rate applicable to from time to time to post office savings account shall be payable.

  • In case of premature closure of 2 year, 3 year or 5 year account on or after 01.12.2011, if the deposit is withdrawn after the expiry of one year from the date of deposit, interest on such deposits shall be calculated at the rate, which shall be one per cent less than the rate specified for a period of deposit of 1 year, 2 year or 3 years as mentioned in the concerned table given under Rule 7 of Post office Time Deposit Rules.

  • Rate of interest - 8.20%, 8.20%, 8.30%, 8.40% compounded quarterly for 1,2,3 & 5 years TD account respectively.
  • The investment in the case of  5 years TD qualify for the benefit of Section 80C of the Income Tax Act, 1961 from 1.4.2007.


 Type of Account

Minimum Deposit

Maximum Deposit

1,2,3 & 5 Year TD

INR.200/- and in multiples of INR. 200/- thereafter

No limit.


Note: The interest rate on Post Office Time Depoist is subject to change

Post Date - 01-Nov-2013 

New post office deposit rule automatic renewal and interest payable on premature withdrawal

Central Government has inserted new rules in post office time deposit with the amendment of rule 6 with the notification no. 222 dated 13 March 2014. The new rules are as under.

1.    Where a deposit in an account standing at the post office working on Core Banking platform become due for repayment, the account shall be automatically renewed from the date of maturity for the same period for which it was opened initially and the deposit shall be eligible for rate of interest ' applicable on the date of renewal.

2.   Where a deposit in 1-year, 2-year, 3-year or 5-year account is withdrawn prematurely before the expiry of 1 year from date of deposit, interest at the rate applicable to post office savings account from time to time shall be payable to the depositor

It means the post office deposit will be automatically renewed if not claimed for the period of opened initially.  Second, earlier on premature withdrawl less than a year, no interest was given by post office time deposit. but now it will be payable

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