Post Office FD Scheme, alternatively referred to as Post Office Term Deposit, is one of the investment options provided by the Indian Postal Services. It enjoys a government-backed endorsement, making it one of the most safe investment options. Many reasons make post office FD an attractive option, including high post office FD interest rate, stability, flexible tenure, low minimum deposit limits, and more.
Let’s check more about post office FD.
What Is Post Office FD?
Post office FDs are, of the savings systems, one of the saving systems operated by post offices in India. It offers depositors a reliable and conducive approach to keeping money if they don’t have easy accessibility to financial institutions like banks. India Post, formerly the Indian Postal Department, offers Deposit facilities to its clients to take care of their surplus money and get interest. The Post Office FD rates offer one of the best-fixed deposit rates in the Indian banking industry. The interest of FD in post office varies from tenure to tenure you select. The minimum sum is even lower, which is Rs. 1000, and there is no upper limit.
Now, let’s check the prevailing FD interest of the post office.
Prevailing Post Office FD Interest Rate
| Tenure | General Public | Senior Citizens |
| 1 year | 6.9% | 6.9% |
| 2 years | 7% | 7% |
| 3 years | 7.10% | 7.10% |
| 5 years | 7.50% | 7.50% |
Minimum Amount for Post Office FD Scheme
Now that we know about the interest in post office FD let’s check the minimum amount of FD. The minimum deposit that you need to open a post office Fixed Deposit account is ₹1,000. You can invest in multiples of Rs.100. There is no maximum investment amount.
Know that at the post office, you can only open one deposit per account in the post office. In addition, you can also open multiple ones in the post office. One can also create a joint account in the post office.
Post Office Fixed Deposit Features
Besides the attractive post office FD interest rate, some other things to note about these investments are:
- One can modify their single post office FD account into a joint account with a maximum of three adults at no cost. Similarly, one can convert their joint account to a single one.
- The FD interest post office is payable annually and credited to the depositor’s savings account.
- You can book Post office FD accounts for 1, 2, 3 or 5 years.
- One can use a cheque or cash when opening an account.
- Premature withdrawal of FD is only possible after six months of opening FD.
- One can open FD via online and offline methods.
- 5-year Tax saving post office deposits, under Section 80C of the Income Tax Act,1961, are deductible (up to ₹1.5 lakhs in a fiscal year).
Who Can Invest In Post Office FD Scheme?
A post office FD suits the investors looking to invest a lower amount. Homemakers are also eligible for women as the principal amount invested till maturity is not liable to any TDS deduction. Investing in this plan for a duration of three to five years will be of the best interest to you.
Premature Withdrawal Of Post Office FD & TDS Deduction On FD Interests
The FD amount will be available for premature withdrawal six months after opening the post office FD account. In case of withdrawal of the account balance after six months from the date of account opening, the post office FD interest rate will be paid as per the Post Office Savings Account interest rates.
Also, note that there will be no TDS deduction from the interest received from post office term deposits. Besides, you can also claim a deduction under Section 80C of the Income Tax Act of 1961. The upper limit is 1.5 lakhs provided under Section 80C in every financial year.
Benefits Of Opening Post Office FD Scheme
1. Safety and Reliability:
Fixed Deposit in Post Office, which is guaranteed by the Government of India, is very reliable and provides the utmost security. This is the reason why they are popular among investors who like to stick to the first rule of investing – the protection of the capital. The sovereign guarantee is responsible for keeping the investment safe against the ups and downs of the market.
2. Attractive Interest Rates:
Most of the time, the post office FD interest rate features competitive interest rates, even surpassing those offered by a number of national banks. Such yields, therefore, are the main attraction of POFDs for investors who are opting for secure gains on their investments. The interest rates are fixed from the donation amount, and the interest is guaranteed to the investors.
3. Fixed and Flexible Tenure Options:
An investor can choose from the fixed tenure options offered by India Post Fixed Deposits. It sets the period that is in adherence to his financial goals. The range of tenure is between one year and 5 years, which lets one make investments for short-term plans as well as long-term plans.
4. Nomination Facility:
Among all Post Office Fixed Deposits services, Nomination is a facility that allows investors to name someone who will be the rightful owner of the money at the time of their death. It helps in the realm of financial planning, which adds to the aspect of security and the beneficiary of the gains from the investments.
5. Accessibility and Convenience:
Post Offices have a widespread network that spans both urban and rural areas, thereby making Post Office Fixed Deposits accessible to a wide segment of society. Participants in the process can take advantage of the simplified and friendly environment in their local post offices, which makes it easy for those who do not have easy access to traditional banking services.
Eligibility To Open Post Office FD Scheme
The following individuals can take advantage of the attractive post office FD interest rate:
- Individuals
- Any person above 10 years of age.
- Legal guardian on behalf of an unsound-minded person.
- Companies, trusts, and NRIs aren’t eligible to open accounts.
Conclusion
This is all about the post office FD interest rate. Investors can visit a post office to learn more about the account opening process and start investing for their desired tenure. It is wise to remain invested for a long duration to gain more interest. Also, you can choose Wint Wealth for a rewarding FD investing experience.
