Post Office Time Deposit: Types and Interest Rate

Learn about Post Office Time Deposit and the flexibility it offers with its different maturity period.
Post Office Time Deposit
4 mins
12 March 2024

When it comes to investing your money, it is essential to consider a variety of options that provide both security and a good return on investment. One such investment option is the Post Office Time Deposit scheme, offered by the Indian Postal Service. It is an ideal investment option for those who are looking for a safe and secure way to grow their savings. In this article, we will discuss the Post Office Time deposit and how it can secure your savings with fixed returns.

What is Post Office Time Deposit (POTD)?

The Post Office Time Deposit also known as National Savings Time Deposit scheme is a financial savings option offered by the Government of India. It provides an attractive interest rate compared to regular savings bank accounts. Individuals can invest in this scheme through post offices across India.

Investing in national Savings Time Deposit accounts is an excellent option for savers, as it offers higher returns and flexibility.

Post Office Time Deposit scheme interest rates

Interest is calculated quarterly but paid annually.

Account types

Interest rate
(As of March 2024)

1 year


2 years


3 years


5 years


Types of accounts

The National Savings Time Deposit scheme has 4 account options, each with different maturity periods of 1 year, 2 years, 3 years, and 5 years. Each account gives a different interest rate.

Read Also: Post Office Saving Schemes: Meaning, Types and Benefits

Who should invest in POTD

The Post Office Time Deposit scheme is an ideal choice for conservative investors seeking guaranteed returns and low-risk options. With fixed tenures ranging from 1 to 5 years, it suits those with short-term financial goals. Senior citizens and retirees can benefit from regular interest payments, providing a secure income stream.

Features of Post Office Time Deposit scheme

  • Post office time deposit schemes offer durations of 1, 2, 3, or 5 years, and only one deposit is allowed per account.
  • Transferring time deposit accounts between post offices is easy.
  • Time deposit accounts can be managed by one person or jointly by multiple people.
  • Account holders can extend the duration of their accounts once they mature.
  • There is no limit to the number of time deposit accounts you can open.
  • The Post Office Time Deposit scheme requires a minimum investment of Rs. 1,000, but deposits must be made in multiples of Rs. 100. Any amount not in multiples of Rs. 100 will be kept in the account, and the remaining balance will be refunded without interest.

Eligibility criteria for opening a Post Office Time Deposit account

The Post Office Time Deposit has different account options to suit everyone. You can have a single adult account. For families, there is a joint account that can include up to three adults. Guardians can open accounts representing minors or person with unsound mind. Even minors above the age of 10 can open this account in their own name.

Read Also: Post Office Recurring Deposit Scheme

Tax benefits under Post Office Time Deposit account

Investments made in the 5 years' Time Deposit are eligible for tax benefits under Section 80C of the Income Tax Act, 1961. However, it is important to note that other account types, such as the 1 year, 2 years, and 3 years deposits, do not qualify for any tax benefits.

Premature withdrawal of Post Office Time Deposit (TD)

  • No withdrawal is allowed within the first 6 months from the deposit date.
  • If the Time Deposit (TD) account is closed after 6 months but before 1 year, the Post Office Savings Account interest rate will be applicable i.e., 4% p.a.
  • If a 2/3/5-year TD account is closed prematurely after one year, the interest will be calculated 2% less than their respective interest rate.
  • Premature closure of a TD account can be initiated by submitting the prescribed application form along with the passbook at the respective post office.

Extension of Post Office Time Deposit (TD) account

  • The TD account can be extended within a prescribed period from the date of maturity: 1 year TD within 6 months, 2 years TD within 12 months, and 3/5 years TD within 18 months.
  • Depositors can request an extension at the time of opening the account.
  • To extend a TD account after maturity, depositors need to submit the prescribed application form and passbook at the respective Post Office.
  • The interest rate applicable to the respective TD account on the day of maturity will be applicable to the extended period.

Also Read: 8 Best Short Term Investment Plans with High Returns

Advantages of Post Office Time Deposit schemes

Post Office Time Deposit schemes offer several advantages, making them a popular choice for investors:

  1. Safety and reliability: Backed by the Government of India, Post Office Time Deposit schemes provide a secure and reliable investment option.
  2. Fixed returns: Investors receive fixed and guaranteed returns, providing stability and predictability in earnings.
  3. Flexible tenures: With different maturity options (1 year, 2 years, 3 years, and 5 years), these schemes offer flexibility to investors based on their financial goals and preferences.
  4. Tax benefits: Investments in the 5 years’ Time Deposit qualify for tax benefits under Section 80C of the Income Tax Act, providing a potential avenue for tax savings.
  5. Premature withdrawal options: While there are conditions, premature withdrawal is possible, providing some liquidity in case of urgent financial needs.

Documents required for post office time deposit

  • SB13 form (pay-in slip)
  • SB3 form
  • Specimen signature slip

How to apply for Post Office Time Deposit (POTD) scheme

1. Online process

  1. Go to the Indian Post eBanking website.
  2. Log in using your registered "User ID" and enter the captcha code.
  3. Click on the 'General Services' tab under the 'Service Request' option.
  4. Follow the on-screen instructions for opening a Post Office Time Deposit account.

2. Offline process

  1. Visit your nearby post office.
  2. Get and fill the POTD application form, along with all the required document.
  3. Deposit minimum Rs. 1000 to open a POTD account.


The Post Office Time Deposit Scheme supported by the Indian government, offers a dependable and secure investment opportunity. Its varied maturity periods and competitive interest rates cater to a wide range of investors. The safety, fixed returns, and liquidity options make it a preferred choice, ensuring stability and meeting the financial goals of investors.

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Frequently asked questions

What is the bare minimum for opening a POTD?

A Post Office Term Deposit can be opened for as little as Rs. 1000.

Is it possible to move my term deposit from one post office to another?

Yes, you can do it by filling SB10(b) form.

Can I get tax breaks if I invest in POTD?

Yes, you can get tax benefit if you held your investment in POTD for 5 year.

Can I transfer my term deposit from one post office to another?

Yes, term deposits can be transferred between post offices.

Is post office time deposit safe?

Yes, post office time deposits are safe as they are backed by the government and offer fixed returns.

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As regards deposit taking activity of Bajaj Finance Ltd (BFL), the viewers may refer to the advertisement in the Indian Express (Mumbai Edition) and Loksatta (Pune Edition) furnished in the application form for soliciting public deposits or refer
The company is having a valid Certificate of Registration dated March 5, 1998 issued by the Reserve Bank of India under section 45 IA of the Reserve Bank of India Act, 1934. However, the RBI does not accept any responsibility or guarantee about the present position as to the financial soundness of the company or for the correctness of any of the statements or representations made or opinions expressed by the company and for repayment of deposits/discharge of the liabilities by the company.

For the FD calculator the actual returns may vary slightly if the Fixed Deposit tenure includes a leap year.