What is a Post Office Fixed Deposit?

Fixed deposit is one of the safest investment avenues offered by banks, Non-Banking Financial Companies (NBFCs) and post offices. A post office fixed deposit, also known as a post office term deposit, is a fixed deposit issued by the Indian Postal Services. Post office fixed deposits are backed by the sovereign guarantee of the Government of India. The post office FD interest rates range from 5.5% p.a. – 6.7% p.a., offering investors stable growth.

Post Office Fixed Deposit Rates 2022

Post office FD is a preferred investment option for a safe investment avenue. These post office FDs are backed by the sovereign guarantee of the government of India.

Here’s a table on features of post office fixed deposit

Particulars

Details

Tenor

1, 2, 3 and 5 years

Minimum deposit amount

Rs. 1,000

Interest rates

5.5% p.a. – 6.7% p.a.

Interest payment

Annually

Mode of payment

Cash/ cheque

Premature withdrawal

Allowed after 6 months*

Nomination facility

Available


*If the account is closed between 6 to 12 months from the date of opening, then Post Office Savings A/c rates will be applicable.

Post office FD interest rates

The Government of India (every quarter) decides post office fixed deposit interest rates under Small Saving Schemes. These rates are, in turn, determined as per the performance of government securities/ bills. A Post office fixed deposit with a tenor of 5 years has an interest rate mark-up of 25 bps over the yield of comparable government securities.

Tenor (years)

Post office FD interest rates

1 year

5.5% p.a.

2 years

5.5% p.a.

3 years

5.5% p.a.

5 years

6.7% p.a.

Here’s a comparison of the latest FD interest rates offered by post offices against FD rates offered by Bajaj Finance Limited.

Tenor (years)

Post office FD interest rates

Bajaj Finance FD interest rates

1 year

5.5% p.a.

6.35% p.a.

2 years

5.5% p.a.

6.95% p.a.

3 years

5.5% p.a.

7.40% p.a.

5 years

5.7% p.a.

7.40% p.a.

Senior citizens can get additional rate benefit of up to 0.25% p.a.

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Features and benefits of Bajaj Finance Fixed Deposit

Here’s a table on the features and benefits offered by Bajaj Finance.

Interest rate

Up to 7.75% p.a.

Minimum tenor

1 year

Maximum tenor

5 years

Deposit amount

Minimum deposit of Rs. 15,000

Application process

100% online process

Online payment options

Netbanking and UPI


Post Office FD: TDS Implication/ Taxation

One significant benefit of investing in Post Office FD is that (TDS*) isn't deducted on the interest earned.

While documenting Income Tax Return (ITR), one can add their investments of fixed deposit in Post Office to claim deduction u/s 80C of the Income Tax Act, 1961. The upper limit for deductions under the said section of the IT Act, 1961 is maxed at Rs. 1.5 lakh, every financial year.

Post office fixed deposit vs Bajaj Finance Fixed Deposit

Suppose you are thinking of redirecting the interest earned from the post office FD. In that case, you can consider an alternative option of investing in high-yielding companies that offer similar guarantees with zero to low risk on FD.

Even though post office FD may offer a higher interest rate than bank FD, it cannot match the interest rate provided on company FDs. You can ensure maximum returns on FDs guaranteed by well-financed and liquid companies like Bajaj Finance. Let us see how you can benefit even further with a Bajaj Finance FD.

  • Investment rate – Bajaj Finance FD offers higher interest rates up to 7.75% p.a., which is higher than any other fixed-income option given the current state of the economy. A post office FD will allow a maximum of 5.7% p.a., which can be further reduced if the government securities (G-sec) yield falls.
  • Flexibility – Bajaj Finance FD offers flexible terms for premature withdrawal (compared to post office FD). It also provides an option to avail a loan against FD at a marginal interest rate.
  • Ease of access – While a post office FD may not offer you many online features, you can easily invest in a Bajaj Finance online FD that enables you to reap the benefit of an end-to-end online paperless procedure. Additional features of doorstep document pickup, multi-deposit and auto-renewal make it even more convenient. You can open a Bajaj Finance online FD account by just using a debit card at a few locations.

Bajaj Finance also accepts deposits from NRIs and is rated high on the safety and stability ranking, making it one of the best investment options for those with a lower risk appetite. To help you compare the features of post office fixed Deposit and Bajaj Finance Fixed Deposit, here’s a table detailing the differences between the two:

Feature

Post office FD

Bajaj Finance FD

High-interest rate

No

Yes

Quarterly interest rate revision

Yes

No

Flexible premature withdrawal

No

Yes

Online account management

No

Yes

Multi-deposit facility

No

No

Auto-renewal facility

Only at CBS-enabled branches

Yes

NRI FD

No

Yes


With 2.46 lakh customers and a total deposit book size of more than 30000 crores, you can trust Bajaj Finance FD to give you maximum returns at little to no risk.

Frequently asked questions

What is the minimum balance required for a post office FD?

The minimum deposit amount to open a post office FD is Rs. 1,000.

Which is better, Post Office FD or Bank FD? What is the difference between post office FD and Bank FD?

The interest rates offered by post office FD and bank FD range between 5.5%-6.7% and 2.5% to 6.50% respectively.

What documents are required to open an FD account with the post office?

The following documents are required to open an FD account with the post office:

Documents Required

Identity proof - Aadhaar card, Voter’s ID card, PAN card etc.

Address proof - Aadhaar card, utility bills (such as electricity bill, water bill), ration card, etc.

At least 2 recent passport sized photographs

Can I open a post office FD account online?

Yes, you can invest in a post office FD online by utilizing the web banking facility offered by the post office.

What is the interest of 1 lakh FD in the post office?

A typical monthly interest rate for a 1 lakh fixed deposit in the current Indian market might range from 5% to 7.5 percent each year. The interest of one lakh rupees each month you might earn this manner would be significant. Senior elderly would benefit more from the 1 lakh fixed deposit interest per month.

Is there a cap on the maximum investment amount for post office fd?

The highest amount you can invest in the post office FD programme has no upper limit. It's worth noting that you can only make one deposit per post office FD account. In the post office, however, you can open multiple accounts.

Is it possible to close the time deposit before maturity?

Yes, you can close your time deposit account before it matures. However, it can only be done after 6 months after account opening.

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