In 2023, Post Office Fixed Deposit Interest Rates continue to be a subject of significant interest for investors across the country. The Post Office, a trusted and time-tested financial institution in India, offers a variety of fixed deposit schemes that cater to the diverse needs of savers.
These schemes provide a safe and secure avenue for individuals to grow their savings with competitive interest rates. Whether you are a general citizen or a senior citizen, the Post Office has tailored its FD rates to accommodate different age groups, making it an attractive option for both short-term and long-term investments. In this overview, we will delve into the latest Post Office FD interest rates for 2023, helping you make informed decisions about your financial investments.
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What is Post Office FD?
- The Post Office Fixed Deposit was introduced by the Indian Central Government.
- While formally known as the National Savings Time Deposit Scheme, it is commonly recognized as Post Office FD. Oversight of the Post Office Fixed Deposit falls under the jurisdiction of the Indian Post Office.
- This scheme was created with the primary goal of promoting a savings culture and offering a zero-risk investment avenue for investors.
- Furthermore, the interest rate for Post Office FD is guaranteed and predetermined. During investment, you will get both the interest amounts and maturity upon tenure completion.
- While it offers a secure investment option, it’s important to note that the returns may not outpace inflation. Therefore, it’s advisable to explore different Post Office alternatives and ensure that your investment objectives are met.
Post Office FD Interest Rates 2023
|Duration||FD Rate for Senior Citizens||FD Rate for Normal Citizens|
|11 months 30 days to 11 months 30 days||6.9 percent||6.9 percent|
|1 year to 2 years 11 months 30 days||7 percent||7 percent|
|3 years to 4 years 11 months 30 days||7.5 percent||7.5 percent|
Note: All interest rates shown above are as on 5th Sep 2023
Characteristics of Post Office FD
- Multiple Account Possibilities
You can also open an unlimited number of Post Office FD accounts in your name or jointly with another account holder.
- Interest Compounding and Rate Adjustments
The interest of Post Office FD gets compounded every quarter and paid out annually. Additionally, the Indian government conducts quarterly reviews of rates for Post Office FD to ensure competitiveness.
- Minimum and Maximum Deposit Limits
The minimum deposit amount is set at Rs 1k and there’s no maximum limit for deposits. Nevertheless, contributions must be in increments of Rs 100.
- Fixed Tenure Options
Post Office FDs are available in predetermined tenures of 1, 2, 3, and 5 years.
- Interest Payout
You can receive the interest amount directly in the savings account.
- Tax Benefits
The 5-year Post Office FD can claim a tax deduction, with a maximum deduction cap of Rs 1.5 lacs based on the amount deposited.
- Taxation of Interest
Interest earned on Post Office FDs is subject to taxation for depositors. It attracts tax for individuals under 60. However, senior citizens aged 60 and above can enjoy an exemption on interest income till Rs 50k.
Eligibility for Post Office FD
To initiate an account for Post Office FD, you can submit a Form-1 application either at your nearest Post Office branch or through the web portal. It’s essential to meet the eligibility requirements below when opening an account:
- Individual Applicants
A single individual can establish an account.
- Joint Accounts
Joint accounts are allowed with a limit of 3 holders.
- Minor Applicants
Minors who are above 10 can establish an account in their own name.
Guardians have the authority to open accounts on behalf of minors or individuals of unsound minds.
Documents Required for Opening a Post Office FD
|Utility Bills such as electricity bills|
|NREGA-issued job card, authenticated by an officer of the state government|
|Two passport-sized photographs|
|National Population Register- issued letter having address and name details|
Early Withdrawal from Post Office FD Account
To commence an early withdrawal, you must submit a Form-4 application.
- Withdrawals are only allowed after a 6-month period from the deposit date. No withdrawals are permitted before this initial 6-month period.
- If a premature withdrawal occurs after the initial 6 months but before 12 months, interest will be paid for the completed months at the interest rate associated with the Post Office Savings Account.
- The withdrawal amount will be reduced by the interest already paid to the depositor, which includes the interest due on the withdrawal.
Prolonging the Tenure of The Account of Your Post Office FD
Once the term deposit period ends, you can prolong the duration of your fixed deposit. However, there are some important points to consider:
- Extension Period: The extension period is only for a few months, providing only a brief window of opportunity. After this window closes, you are required to withdraw your deposit upon maturity. If you choose not to withdraw, you won’t accrue any additional interest on the matured amount.
- Maximum Extensions: You have the flexibility to request a maturity extension for your initial FD investment on two occasions.
- Interest Rate: The interest rate for the maturity extension period will be based on the prevailing rate at the time of an extension. If your first FD matures on January 1, 2021, the interest rate for the extended tenure will be determined by the rate in effect on January 1, 2021.
- Flexible Choice: You have the flexibility to decide whether to get a maturity extension period when doing the first deposit payment. Moreover, you can decline the extension before the repayment date.
- To get a maturity extension period, please follow these guidelines:
|Account Category||Duration from the repayment date within which the choice to extend can be made|
|1 year FD||6 months|
|2 year FD||12 months|
|4 year FD||18 months|
|5 year FD||18 months|
Pledging or Transfering Against Post Office FD
- You can utilize your Post Office FD as collateral is available. To do so, you need to follow these steps:
- Complete Form-5 and obtain a letter of acceptance from the entity receiving the pledge.
- Submit Form-5, along with the acceptance letter, at your nearest Post Office in India.
- Your account can get transferred to one of the following entities: The Indian President or the State Governor, RBI, a Cooperative Society, a Scheduled Bank, a private or public corporation, or a housing finance company authorized by the NHB and officially recognized by the Central Government, and a local authority
Criteria to Meet To Transfer or Pledge the Account
To transfer or pledge the account, you must meet the following criteria:
- When pledging an account initiated in place of a minor, you or the guardian need to provide written certification confirming the minor’s existence and the transfer must benefit the minor.
- When offering an account established for an individual with diminished mental capacity, you or the guardian need to provide written certification confirming the person’s existence and the transfer must benefit them.
- If the account gets transferred as collateral, the officer in charge of authorization must endorse in the account’s record, stating, “Transferred as security to….”
- Upon the release of the pledge, the account can get transferred back, but this requires prior written approval from the officer in charge of authorization. The officer in charge of authorization at the accounts office needs to endorse the certificate and account, indicating, “Transferred back to….”
- When the TD or FD deposit is returned to the depositor who is original, the transferee will get considered the depositor.
- In the case of a visually impaired individual or someone with a physical infirmity preventing them from operation of the account, they can pledge their deposit through a literate individual authorized for this objective.
Payment in the Event of the Account Holder’s Demise
When a sole account holder or all account holders pass away, the funds in deposit account will get disbursed to either the legal heir or nominee.
- Multiple Nominees or Legal Heirs
In case there are multiple surviving legal heirs or nominees, deposits will get distributed according to the proportions specified in the instructions for nomination. In the absence of specific proportions, the amount deposited will be divided equally.
- Nominee as a Minor
If a nominee is a minor, the deposit will be paid to the individual that the depositor has designated. But, if such a designation does not exist, the deposit will get received by the minor’s guardian.
- Continuation of Account by Surviving Nominees and Legal Heirs
Surviving legal heirs and nominees can also maintain the account plus get the deposit amount along with accrued interest. It’s important to note that a maximum of three surviving legal heirs and nominees is allowed.
- Closure of the Account in the Absence of Continuation
It will be closed if the surviving legal heirs and nominees choose not to continue the account. The outstanding deposit amount, along with interest, will get repaid. Interest will be calculated for the duration the deposit remains in the account.
- Treatment of the Account in the Event of the Demise of Single or All Joint Holders
When all joint account holders or a single account holder pass away, the surviving account holders or holders will be regarded as the account owner(s). They will assume the position of the original depositors and have the authority to either keep the account active or close it.
Forms required for Post Office FD Account
To open a Fixed Deposit (FD) account at the Indian Post Office, you must submit specific forms for different purposes.
|Type of Form||Function|
|Form 1||Form Request to Initiate an Account|
|Form 2||Form Request to Terminate the Account|
|Form 3||Form Request to Extend the Account|
|Form 4||Form Request for Early Closing of the Account|
|Form 5||Form Request to Pledge the Account|
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Q1. How many FDs can be opened in Post Office?
A. There are no limitations on the quantity of Fixed Deposits (FDs) you can establish with the Post Office.
Q2. How to check the fixed deposit balance in Post Office?
A. You may verify your Post Office FD balance through both online and offline methods. To do so online, access the Post Office internet banking portal and log in. Alternatively, you can visit the nearest Post Office bank to update your passbook and inquire about your FD balance in person.
Q3. What is Post Office FD ROI for 10 lakh deposit for 1 year?
A. For a deposit of 10 lakh INR in a Post Office FD for 1 year, the interest calculated amounts to INR 71,224, resulting in a maturity value of INR 10,71,224.
Q4. What are the available FD tenures in the Post Office?
A. The duration of a Post Office FD can vary from 11 months and 30 days to 4 years and 11 months and 29 days.
Q5. What is senior citizen fixed deposit interest rates in the Post Office?
A. For senior citizens, the Post Office offers fixed deposit interest rates that span from 6.9% to 7.5% per annum, covering both the minimum and maximum investment durations.
Q6. What is Post Office FD minimum deposit amount?
A. The Post Office FD allows for a minimum investment of INR 1,000, with no upper limit on the maximum investment amount.
Q7. How many years FD will double in Post Office?
A. To determine the number of years it takes for a Post Office Bank FD to double, you can utilize the 72 rule. By dividing 72 by the interest rate, you’ll arrive at the approximate doubling period. Currently, the highest Post Office FD interest rate stands at 7.5%, meaning that investors will see their investment double in approximately 9.60 years. Likewise, senior citizen depositors, who enjoy the highest FD rate of 7.5%, can also expect their FD investment to double in around 9.60 years using this rule.
Q8. What is Post Office FD scheme interest rate for 5 years?
A. The Post Office FD scheme offers an annual interest rate of 7.5% for a period of 5 years.
Q9. What is the highest interest rate on Post Office 1 year FD scheme?
A. The most favorable interest rate available for the Post Office 1-year FD scheme is 6.9% per annum.
Q10. What is the highest Post Office FD rate today?
A. Both general citizens and senior citizens can benefit from the highest Post Office FD rates, which stand at 7.5% per annum for each group.