Fixed Deposits-All you need to know: Features and Benefits

Save & Invest

Anyone can open a Fixed Deposit account at the post office with cash or a check. The government uses the check realisation date as the account starting date. NRIs are not allowed to open fixed deposit accounts at the post office. The post office Fixed Deposit is a great choice for investors who like to be careful with their money. People who don’t want to take a lot of financial risks and want a steady source of income and protection for their money, like those who are retired or about to retire, are good candidates. So, let’s talk more about the fixed deposit plans at the post office.

Features of the Post Office Fixed Deposit Scheme


Until maturity, you earn interest on top of the return. Post office Fixed Deposit accounts offer a competitive interest rate that often beats that of a bank Fixed Deposit.


You can open a post office Fixed Deposit account with as little as Rs. 1,000 and as much as you want. You can also change your post office Fixed Deposit account from a joint account to a single account or from a single account to a joint account. The number of fixed deposit accounts you can open at a post office has never been limited. You can open a post office Fixed Deposit account in the name of a minor, but the account must be managed by the minor’s parent or legal guardian. Moving a post office FD account from one post office to another is also possible.

Upon Maturity

When your post office Fixed Deposit account is up for renewal, you can either take your money out or keep it for the same time. You can also take the money out of your post office Fixed Deposit account before it matures, but you must follow certain rules and regulations set by the post office.

The Effects of Tax

Section 80C of the Income Tax Act of 1961 lets the post office Fixed Deposit programme get a five-year tax break.

Pros of post office Fixed Deposit Programs

More than 93,55,825 time deposit accounts are currently open across the country. It is one of the most popular plans in the country because the return on the deposit is guaranteed, and there is very little risk.

There are fixed deposit terms of one, two, three, and five years, and you can choose to get interested every year based on compounded rates.

It is possible to set up a savings account so that interest is added automatically.

Some of the best reasons to open a post office Time Deposit account are:

  • There is no cap on how much you can invest, and you can start with as little as Rs. 200.
  • It is easy to move an account from one post office to another.
  • You can get your deposits early.
  • POTD investments are safer than FDs because the principal invested and a state guarantee cover the interest earned.
  • The maximum number of accounts you can open at any post office is unrestricted.

Eligibility Criteria

To open a post office Time Deposit Account, you must meet the following requirements:

  • Anyone in India can open and use this account alone or with someone else.
  • This account can be opened by a child at least ten years old.
  • A parent or legal guardian can open a post office Time Deposit account for a minor.
  • Indians who do not live in the country cannot open TD accounts at the post office.

How do I get a fixed deposit from the post office?

People in rural areas have more used fixed deposit programmes at the post office than at banks. You can choose any term between 1 and 5 years for a POFD. Remember that the interest rate will increase with the increased tenure of FD. The interest rate on a post office Fixed Deposit is somewhere between that of a bank’s FD and that of a company’s FD.

There are times when the interest rates on fixed deposits at the post office are higher than those on fixed deposits at banks. The interest rate on your post office Fixed Deposit is between that of a bank FD and a company FD.

Benefits from Taxation Under POTD

Small investments in savings accounts made at post offices are not taxed based on where the money came from (TDS). Keep in mind that the interest earned on these investments is added to the depositor’s annual income in the year it is earned and is taxed at the investor’s marginal tax rate.

Also, Section 80C of the Income Tax Act says that people who put money away for five years can get tax breaks.


With all the features we’ve discussed, a fixed deposit programme from the post office is the best choice for people who don’t like taking risks. You should choose this programme because it is one of the best if you want a safe way to invest that gives you a steady interest income. As was already said, sometimes a post office’s Fixed Deposit offers a higher interest rate than a bank’s fixed deposit. Before choosing a way to invest, you should think about the interest rate. These FD programmes are run by the National Savings Institute, which is a division of the Department of Economic Affairs within the Union Ministry of Finance, similar to other modest savings programmes. post office Fixed Deposits (PO FD) are also referred to as National Savings Time Deposits as a result. You can learn more about fixed deposits by visiting Piramal Finance.