Post Office Time Deposit Scheme:- India Post offers a popular time saving scheme called Post Office Time Saving Scheme. The program is open to everyone and is very popular in rural and remote areas of the country. Read the full article to know about the Post Office Time Guarantee Program including benefits, features, perks, eligibility criteria, required documents, tax benefits under POTD, POTD cost elimination, and more.
About Post Office Time Deposit Scheme
One of the most popular projects of India Post is Post Office Post Office TD (POTD). POTD funds have no income limits. Additionally, the amount can be increased by Rs.100. At the beginning of every financial cycle, the Indian Finance Ministry reviews interest rates. Government securities are used to determine interest rates and are spread across government bonds.
Post Office Time Deposit Scheme(Benefits)
- The POTD Scheme offers a guaranteed rate of return.
- Even minors 10 years old and older can manage the account independently.
- Section 80C of the Income Tax Act allows tax deductions for 5 Year Time Deposits.
- There is no maximum investment amount and the investments can be made with as little as Rs. 200.
- There is a facility for nomination.
- Accounts can simply be transferred between post offices, and deposits can be withdrawn early.
- There is no restriction on how many accounts can be opened at any one post office.
- Because the principal invested and the interest received are covered by a state guarantee, POTD investments are thought to be safer than FDs.
Post Office Time Deposit Scheme(Features)
- One deposit may be placed in a single account under the POTD schemes, and the tenure of the deposit may be 1, 2, 3, or 5.
- Transferring the time deposit accounts from one post office to another is simple.
- This post office program assures investors of returns on their money.
- After a time deposit account matures, account holders have the option of extending its tenure.
- Time deposit accounts can be individually or jointly owned.
- The account will automatically renew for the initial deposit duration at the applicable interest rates as of the date of maturity if the proceeds from a mature account are not withdrawn.
- All public sector banks as well as several private institutions, including ICICI Bank, Axis Bank, and HDFC Bank, have recently received authorization from the central government to permit investors to open POTD accounts.
- There is no restriction on how many time deposit accounts can be opened.
- Investors might favour POTD investments over bank fixed deposits.
- The Post Office Time Deposit program requires a 200 rupee minimum deposit. The sum to be placed should only be in multiples of 200, it must be noted. If not, the sum in multiples of 200 will be kept in the account and the remaining funds will be repaid without any interest.
Post Office Time Deposit Scheme(Intrest Rate)
| Account Term | Interest Rate Applicable |
| 01 year | 6.9 percent |
| 02 years | 6.9 percent |
| 03 years | 6.9 percent |
| 05 years | 7.7 percent |
Post Office Time Deposit Scheme(Eligibility)
- Every Indian citizen can open an account.
- Minors over 10 years old cannot open an account, but they can still manage the account.
- Up to three adults can open contact accounts with this person.
- A parent or legal guardian can open an account for a child.
- Administrators can open accounts for non-account holders.
- Groups and funds such as benefit funds, trust funds, lay funds and institutional investors are excluded from the POTD scheme.
- NRIs are not allowed to open bank accounts but are not allowed to save.
Post Office Time Deposit Scheme(Documents)
- Passport size photographs
- Filled application form of Post Office Time Deposit Scheme
- Identity Proof like Aadhar Card, PAN Card, or Voter ID
- Address Proof like Ration card, Aadhar card, Voter ID, PAN card, Driving Licence,
- Income Proof like Salary slips for the last three months or statements of the bank account for the recent six months
Post Office Time Deposit Scheme(Taxation Benefits)
There is no tax deduction at source (TDS) for deposits made by small businesses at post offices. It’s important to remember that the interest earned on these investments will be added to the borrower’s gross income in the year the interest is received and taxed at the same rate. However, deposits made for 5 years are eligible for tax benefits under Section 80C of the Income Tax Act.
POTD Funds Premature Withdrawal
Post Office Time Savings Account holders can withdraw funds before the account matures. The only requirement for early withdrawal eligibility is that 6 months have passed since the date of deposit. The terms and conditions that apply to early cancellations are as follows. –
- If the 1/2/3 or 5-year POTD is withdrawn early after 6 months but not more than one year from the date of bank account opening, simple interest will be paid at the rate of postal savings account interest.
- One year from the account opening date, if the TD account is withdrawn 1/2/3 or 5 years in advance, the interest charge will be the first period interest rate minus 1%. He saved an account.
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