Post Office Time Deposit

Post office time deposit is what we generally call fixed deposit in banks. Post office time deposit is a saving scheme where a customer can deposit a fixed amount of money and will earn interest on this amount for a fixed period. There are 4 fixed periods prevailing at the moment in India post. As such there are 4 types of Post office time deposit accounts. They are

1 year Time Deposit
2 year Time Deposit
3 year Time Deposit
5 Year Time Deposit

post office time deposit account complete information

Some Important Features of Post Office Time Deposit accounts.

Any Individual can open the time deposit account.
There is no limit on the amount of deposit
A minimum lock in period of 6 months exists for the all the time deposit account.
After 6 months but before 12 months if you close the account you will only get interest at only saving account rates.
For 2,3 and 5 year time deposit account if you close the account after 1 year but before the actual period of deposit, you will get interest at discounted rates. The excess interest which is paid before will be discounted from the principle amount.
5 year post office time deposit account is eligible for tax exemption. But the interest earned on the deposit is taxable.
5 year time deposit can also be pledged as security.

So these are some important features of Post office time deposit account. We will now see some other details about time deposit account.

How to Open A Post Office Time Deposit Scheme Account

To open a post office Time Deposit account you have to fill out the prescribed application form and submit it in any post office.
Along with the application form you also have to submit a copy of your Identity proof and address proof.
Self attestation ( put your signature on the copies) is necessary for all the documents you are producing for opening of savings account.
The mode of deposit can either be cash or you can give any bank cheque. If you already have a savings account in any post office you can give a cheque from that account also.

Who can open Post Office Time Deposit Scheme Account?

Any Indian citizen can open a post office Time Deposit account. Provided they are not currently residing in any country other than India.
A saving account can be opened all individuals above 18 years which can be operated by themselves.
For all the individuals who are below 18 years, the account will be managed by guardians( mother /father or legal guardian)

Who can operate Post office Time Deposit Scheme account?

Post office Time Deposit Scheme account can be operated by 1. Self if the account is a single account, 2. Up to 3 Account holders if the account is either a Joint A or Joint B account.
Guardian ( Mother/Father or legal guardian) in case of an account opened in the name of a minor.

Whether Nomination Facility is available?

Yes nomination facility is available. You can give a nomination at the time of opening of account. You can also change nomination at any time.

Whether the account can be closed prematurely?

Yes, but the account can be closed only after a minimum period of 6 months from the date of opening.
If you close the account after 6 months but before 1 year of a 1,2,3 or 5 year TD account you will only get interest at the rate of a savings interest only.(Which is generally very less.)
Premature closure of account results in reduced rates of interest by 2%. That means if at the time of opening of account, the prevailing interest is 6.7%, but if you close the account prematurely, the rate of interest at which the interest is paid to you will become 4.7%.

So these are all the basic points which you should know to open a post office time deposit account.

If you still have any doubts the scheme, do comment below and we will be happy to help you.

Cheers.