Post Office Schemes: Post offices run a variety of schemes, just like banks do. Another one of them is a fixed deposit. Post office time deposit is the term for this. The Post Office Time Deposit Programme lasts for one, two, three, and five years. The length of tenure affects the interest rate. The highest interest rate currently offered on time deposits is 7.5%, with a five-year fixed term.
Potential Losses on Premature Closure
However, you might have to incur losses if you attempt to close the account before it matures after you have invested money. It is not possible to close a Post Office Time Deposit Account before six months have passed since the date of deposit. You will receive a refund on your investment based on the interest rate that is applicable to savings accounts if you close the account after six months but before a year. Interest is currently offered on Post Office Savings Accounts at a rate of four percent.
Deduction of Two Percent Interest on Premature Closure
On the other hand, you will receive your money back after deducting two percent interest from the current interest rate that applies to time deposits if you close your FD account for two, three, or five years after one year. In other words, if you are receiving interest at a rate of 7%, you will receive interest at 5% instead of 7% upon premature closure completed after a year, and if you are receiving interest at a rate of 7.5%, you will receive interest at 5% upon premature closure completed after a year. The interest rate in this case will be lowered to 5.5%.
What are Post Office TD’s interest rates?
- On one-year account – 6.9% per annum interest
- On two year account – 7.0% per annum interest
- On three year account – 7.0% per annum interest
- Interest on five year account – 7.5% per annum
Flexible Deposit Amounts
There is no maximum amount that you can deposit in a Post Office Time Deposit; the minimum is Rs 1000. No account restrictions apply, so you are free to open as many as you like. The interest rate that is in effect at the time the account is opened will stay in effect until the account’s tenure is over.
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