The Post Office Time Deposit (POTD), commonly known as a Post Office Fixed Deposit, is one of the most reliable savings instruments in India.
As of April 2026, the interest rates for the first quarter (April–June) have been maintained at steady levels.
1. Latest Interest Rates (April–June 2026)
Interest is calculated quarterly but paid out annually.
| Tenure | Interest Rate (p.a.) |
| 1 Year | 6.9% |
| 2 Years | 7.0% |
| 3 Years | 7.1% |
| 5 Years | 7.5% |
2. Key Features
Minimum Investment: ₹1,000 (and in multiples of ₹100 thereafter).
Maximum Limit: There is no upper limit on the amount you can invest.
Account Types: Can be opened as a single adult account, a joint account (up to 3 adults), or on behalf of a minor (10+ years can also operate their own).
Safety: 100% safe as it is a government-backed small savings scheme.
3. Tax Benefits (Section 80C)
Tax treatment depends on the tenure you choose:
1, 2, and 3-Year Deposits: No tax deduction benefits. The interest is fully taxable as per your income tax slab.
5-Year Deposit: Qualifies for a tax deduction of up to ₹1.5 Lakh under Section 80C of the Income Tax Act (applicable under the Old Tax Regime).
TDS: The Post Office does not deduct TDS on the interest earned; however, the investor is responsible for reporting it as "Income from Other Sources."
Senior Citizens: Under Section 80TTB, resident senior citizens (60+) can claim a deduction of up to ₹50,000 on interest income from deposits.
4. Premature Withdrawal Rules
If you need your money before the maturity date, specific rules and penalties apply:
Before 6 Months: No withdrawal is allowed.
Between 6 and 12 Months: You can close the account, but you will only earn interest at the Post Office Savings Account rate (currently 4.0%), instead of the FD rate.
After 1 Year: For 2, 3, or 5-year deposits, the interest will be recalculated at 2% lower than the specified Time Deposit rate for the completed years. For any remaining period less than a year, the 4.0% savings rate applies.
5. How to Open an Account
Physical: Visit any Post Office with your Aadhaar, PAN card, and a cheque or cash for the deposit.
Digital: If you have an existing Post Office Savings Account with Internet Banking or the IPPB App, you can open a Time Deposit online instantly.
Extension: Upon maturity, you can extend the deposit for the same tenure.
For a 1-year TD, you have 6 months to decide; for a 5-year TD, you have up to 18 months post-maturity to extend it.
Expert Tip: If you are a senior citizen, check the Senior Citizen Savings Scheme (SCSS) first. At 8.2%, it offers a significantly higher return than the standard 5-year Time Deposit.
