September 28, 2023

Post Office Time Deposit Scheme – Gets More Interest Than FD

Recently, the country’s largest bank SBI has cut interest on fixed deposits (FD) for the second time in the month of May itself. In such a situation, if you are looking for an investment option in which your money is safe and you also get good returns, then the post office time deposit scheme can prove to be the right option for you. It is also called a fixed deposit or FD account. Here, inein this post,  I will let you about this scheme.

Special things related to this scheme:
  • One can open a fixed deposit account in the post office through cash or cheque.
  • According to India Post, in the case of cheque, the account will be deemed to have been opened from the date of receipt of the cheque amount in the government account.
  • This account can also be opened in the name of a minor and a joint account in the name of two adults.
  • For opening a post office FD account, a minimum deposit of Rs 1000 is required. There is no maximum limit.
  • The post office time deposit account offers interest rates ranging from 5.5 to 6.7 percent for a period ranging from 1 to 5 years.
  • Under this scheme, interest is paid on an annual basis, but it is calculated on a quarterly basis.
According to India Post’s website, the interest rates are as follows.
Time              –             Interest Rate (%)
1 year            –             5.5
2 years          –             5.5
3 years          –             5.5
5 years          –             6.7
  • Investment for 5 years gets tax rebate benefits
  • The interest from this scheme is taxable and it adds to the annual income of the person who has invested in it. According to the official website of India Post, one can avail tax exemption under Section 80C of the Income Tax Act, 1961 for investing under a deposit of 5 years. For more information, visit this website.

How much interest is SBI paying on FD?

SBI Bank FD interest Rates
Interest Rate
 for common people (%)
Interest Rate for
 Senior Citizens 
7 to 45 days    2.9 3.4
46 to 179 days 3.9 4.4
180 to 210 days 4.4 4.9
211 to One Year 4.4 4.9
One Year to Two Years 5.1 5.6
Two Years to Three Years 5.1 5.6
Three Years to 5 Years 5.3 5.8
5 Years to 10 Years 5.4 6.2

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