Tax Corner
Post Office Time Deposit Account

  • Who can invest
    Individuals are permitted to invest in Post Office Time Deposits. Any person can open an account, whether singly or jointly with another person. An account can be opened on behalf of a minor or person of unsound mind. Even more than one account can be opened without any limit. NRIs are not permitted to invest in Post Office Time Deposits.

  • Deposits
    Deposits can be made in multiples of Rs 200. There is no upper limit on the investments.

  • Maturity
    The investment can be made for 1 year, 2 years, 3 years or 5 years.

  • Interest
    Interest on time deposits is payable as under:

        Interest rate table
    Time (Yrs) Interest (%)
    1 6.25
    2 6.50
    3 7.25
    5 7.50

  • Withdrawal
    Withdrawals are not permitted before 6 months. No interest is payable if deposit is withdrawn after 6 months but before 1 year. If deposits made for 2 years, 3 years, or 5 years are prematurely withdrawn after one year, the interest will be paid at a rate 2% less than the rate applicable to the period for which the deposit has run.

    For example, where the completed years and months in the case of deposit in a 5 year deposit exceeds 3 years, interest shall be calculated at the rate which shall be 2% less than the rate specified for a deposit of 3 years.

  • Tax benefit
    Investments in 5-Yr deposits are eligible for tax benefits under Section 80C of Income Tax Act subject to an upper limit of Rs 100,000.