Read about information on Post Office Time Deposit Accounts in India

Post Office Time Deposit Account

Post office time deposit account is just like the bank fixed deposit account. These time deposits are meant for those investors who want to deposit a lump sum for a fixed period.

How to Open Account
Time deposit account can be opened at any post office with a minimum deposit of Rs. 200. There is no maximum limit for the account.

Who Can Open Account
Time and Amount of Deposit
The amount can be deposited for 1year, 2year, 3year, and 5years. The deposited amount is repayable after expiry of the period for which is of 1 year, 2 years, 3 years or 5 years. One has to deposit minimum amount of Rs 200 while there is no cup on maximum limit.

Interest Paid
Interest is calculated on quarterly compounding basis, and is payable annually. Rate of interest varies according to the period of the deposit and is decided by the Central Government from time to time. Rate of interest increases with duration of deposit. Usually it is between 6 to 8%.

Income Tax Benefit
Premature Withdrawals
Premature withdrawals from all types of post office time deposit accounts are permissible after expiry of 6 months with certain conditions. Principal amount cum accumulated interested is paid only at maturity. If a person withdraws after six months, amount is returned without interest. On withdraw after one year, interest is paid, but it is two per cent less.

Comparison Between Post office Time Deposits and Banks' Fixed Deposits