Post Office Time Deposit Scheme is a well-known investment choice offered by India Post. It lets anyone, especially people in rural and remote areas, save money safely and earn interest. If you want to know everything about the Post Office Time Deposit Scheme, including benefits, features, interest rates, eligibility, required documents, taxation, and withdrawal rules, keep reading.
Post Office Time Deposit Scheme 2025
One of the trusted savings plans in India is the Post Office Time Deposit Account (POTD). You can invest any amount, starting from just Rs. 200, and in multiples of Rs. 100. The Government of India reviews the interest rates each financial quarter to keep them competitive, based on government securities returns.
Benefits of Post Office Time Deposit Scheme
- Guaranteed returns with fixed interest rates.
- Account holders aged 10 years or above can open and operate accounts on their own.
- Tax benefits under Section 80C for 5-year deposits.
- No maximum limit on the investment amount.
- Nomination facility is available to protect your investment.
- Easy transfer of accounts between post offices and premature withdrawal allowed.
- You can hold multiple accounts at the same or different post offices.
- Investments are backed by the Government of India’s guarantee, making it safer than bank fixed deposits.
Features of Post Office Time Deposit Scheme
- You can select deposit terms of 1, 2, 3, or 5 years.
- Accounts are easily transferable across post offices in India.
- Option to renew deposit after maturity at current interest rates.
- Accounts can be opened singly or jointly by up to three adults.
- If the money is not withdrawn after maturity, the account automatically renews for the same term.
- Several major banks are now authorized to open POTD accounts, increasing access beyond post offices.
- The minimum deposit required is Rs. 200, and deposits must be in multiples of Rs. 200.
Post Office Time Deposit Interest Rates 2025
The Ministry of Finance sets the quarterly interest rates. Here are the latest rates for different tenure options:
| Deposit Tenure | Interest Rate |
|---|---|
| 1 year | 6.9% |
| 2 years | 6.9% |
| 3 years | 6.9% |
| 5 years | 7.7% |
Who Can Apply? Eligibility Criteria
- Any Indian citizen can open a POTD account.
- Minors aged 10 years and above can open and manage accounts.
- Joint accounts can be opened by up to 3 adults.
- Parents or guardians can open accounts on behalf of minors or others who cannot operate accounts.
- Institutions, trusts, and non-resident Indians (NRIs) cannot open POTD accounts.
Documents Needed to Open an Account
- Passport-sized photographs.
- Completed application form for the Post Office Time Deposit Scheme.
- Identity proof such as Aadhaar Card, PAN Card, or Voter ID.
- Address proof like Ration card, Driving Licence, or any valid government-issued document.
- Income proof including recent salary slips or bank statements (last 3-6 months).
Tax Benefits on Post Office Time Deposit Scheme
POTD does not have Tax Deducted at Source (TDS) on interest income for small savers. However, interest earned is added to your total income and taxed according to your income slab. Deposits for 5 years qualify for tax deduction under Section 80C up to Rs. 1.5 lakh.
Premature Withdrawal Rules for POTD Accounts
If you want to withdraw before maturity, you can do so after keeping your investment for at least 6 months.
- If withdrawn between 6 months and less than 1 year, simple interest is paid as per the Post Office Savings Account rate.
- If withdrawn after 1 year but before maturity, the interest rate paid will be 1% less than the current rate for the chosen deposit term.
This flexibility helps you access money in emergencies without losing your entire investment.