Post Office Time Deposit Scheme: Check Complete Detail

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The Government of India has kept open various doors for creating a habit of savings amongst the citizens. Post Office Time Deposit Scheme is an exclusive example of such an initiative where the Government looks forward to support the citizens with an option to invest for a period of 1 to 5 years and with an amount which is as low as INR 200.

A person who invests under the Post Office Time Deposit Account is also eligible for claiming deductions from the IT authority.

Who can open a Post Office Time Deposit Scheme?

The Government of India has given absolute liberty to the citizens in respect of opening a Post Office Time Deposit Scheme. People who satisfy any of the given conditions are eligible to open the aforesaid account:

  • An individual
  • Two Individuals, the account will then be a joint account.
  • A minor, his age should be more than years.

Things to know for Post Office Time Deposit Scheme

There are certain important things that a person should know about Post Office Time Deposit Account. They are:

  • The account can be opened with INR 200 only, the deposits should be in multiple of INR 200.
  • Minors can operate their accounts under this scheme, if they are above the age of 10 years.
  • Joint accounts can be converted into 2 different individual accounts and vice-versa.
  • Account can be shifted from one post office to another.
  • An account holder has the option to name a nominee at the time of opening the account or during the operation of the account.
  • A person can invest in this scheme from a period of 1 year to 5 years. Different rate of interests apply.

See Also: Post Office Monthly Deposit Income Scheme

Post Office Time Deposit Scheme Maturity, interest & Withdrawals

It is important to know for every investor about the maturity of his investment. Since, under this scheme there are different investment period, the rate of interest varies accordingly. This following chart will give a clear indication:

PeriodRate of Interest
1 Year8.40%
2 Years8.40%
3 Years8.40%
5 Years8.50%

The above mentioned rates are effective from 1st April, 2014 and ever since, there are millions of Indian citizens who have availed the benefit of this scheme.

Income Tax Benefits of Post Office Time Deposit Scheme 

Wondering about the range of benefits that you will be getting after investing under this scheme? Here is all that you need to know!

As a taxpayer, you will be getting a deduction for investing under the Post Office Time Deposit Account. The applicable section is Section 80C and a total deduction upto INR 1, 50, 000 can be made provided the taxpayer has invested in a 5 year term scheme.

However, it should be taken into consideration that if a taxpayer also has other investments which qualifies under section 80C, then no extended benefit will be offered. In other words, the overall limit under Section 80C will remain fixed at INR 1, 50, 000.

So, this year plan your investment and take advantage of the deposit schemes arranged by the Government of India.


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