Tax Savings in FY25, Time Deposit: Post Office Small Savings Schemes are quite popular among Indians because they are risk free and accessible. In this, the time deposit scheme of the post office is like the fixed deposits of banks.
Tax Savings in FY25, Time Deposit: Post Office’s small savings scheme ‘Time Deposit’ is a better scheme for tax savings. Post Office Time Deposit Account can be opened in any post office of the country. Under this scheme, you can save tax on deposits for 5 years. Know that currently there are two types of tax regimes in the country. New tax regime and old tax regime. Tax deduction of section 80C can be claimed only in the old tax regime.
Post Office Small Savings Schemes are quite popular among Indians because they are risk free and accessible. In this, the time deposit scheme of the post office is like the fixed deposits of banks. Post Office Time Deposit Account can be opened in any branch for a period of 1, 2, 3 and 5 years. In this, the benefit of tax deduction can be availed on deposits of 5 years.
Post Office TD: Current Interest Rates
| Duration | Interest rate (in percent) |
| 1 year | 6.9 |
| 2 years | 7.0 |
| 3 year | 7.1 |
| 5 years | 7.5 |
Post Office TD: Tax exemption up to Rs 1.5 lakh
According to Section 80C of the Income Tax Act 1961, tax deduction up to Rs 1.5 lakh can be claimed on a deposit of 5 years. For risk-averse investors, investing in post office fixed deposits is a preferred option.
Account can be opened online as well as offline through Post Office NetBanking. Post Office Time Deposit Account can be opened singly or jointly (up to 3 members). It can be transferred from one post office to another. Minors can open accounts under legal guardian. More than one account can be opened in any post office. There is facility of nomination in the account.
POTD account has the facility to withdraw money prematurely or before maturity. This is called pre-mature withdrawal. According to the rules, pre-mature withdrawal can be done after 6 months from the date of account opening. If withdrawal is made between 6-12 months from the date of account opening, interest will be earned as per Post Office Savings Account rates.
Post Office TD: Know this also
- Post office time deposit account can be opened for a minimum of Rs 1,000. After this, you can deposit as much as you want in multiples of Rs 100.
- If money is not withdrawn after maturity, no interest is received on the deposited amount during that period.
- The account should be changed in the name of the minor after he completes 18 years.
- If the deposit is made through cheque, then the date of receipt of the check will be the starting date of TD and interest will be calculated from this date only.
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