This program’s interest rate is routinely updated.
Post Office Fixed Deposit, also known as the post office time deposit (POFD), can be compared to the bank’s fixed deposit (FD) programme. The India Post programme provides a guaranteed return to the depositor, who makes a fixed-length deposit. Any Indian citizen may open a POTD account. Cash or a cheque may be used to open the account. The account’s opening date is listed as the day the bill was realised.
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A minimum of Rs. 1,000 is needed to start one of these accounts. The significant amount that can be deposited has no upper limit. Additionally, a maximum of three people may open the account jointly. There are no limitations on the number of accounts one person may create. They are free to move their account from one Indian post office to another.
One might choose to lock in their money for one, two, three, or five years. A formal application can be sent to the post office to prolong the term. This programme’s interest rate is routinely updated. The annual payment is made after a quarterly calculation. The following are the most recent POTD rates as of the second quarter of the fiscal year 2021–2022:
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1 Year = 5.5%
2 Years = 5.5%
3 Years = 5.5%
5 Years = 6.7%
According to Section 80C of the Income Tax Act of 1961, depositors are also eligible to claim income tax exemptions of Rs. 1.5 lakh. These exemptions, nevertheless, are only valid for the five-year lock-in term. Within six months of making the deposit, the depositor is not permitted to withdraw any money.
The rate of interest offered is the rate set for a savings account if the corpus is prematurely withdrawn between six and twelve months.
