Investing in post office has many benefits including safety of funds backed by government guarantee, good returns and easy access even in remote areas.
You can invest in post office FDs for 1, 2, 3 and 5 years duration. Minimum deposit amount is Rs. 1000/- and above in multiples of Rs. 100. There is no maximum limit.
A fixed deposit placed with the Indian Post Office for a tenor of 5 years is eligible for tax benefits u/s 80C of the Income Tax Act. 1961.
The interest rates range from 5.50% p.a. to 6.70 % p.a. For an FD for 5 years, the interest rate is 6.70% p.a. and for 1, 2 & 3 years tenors, the rate of interest applicable is 5.50% p.a.
Any adult or a maximum of 3 adults can open a joint account FD with the post office. A minor above 10 years of age can also open a post office FD in his own name.
The FD interest is calculated quarterly but credited on an annual basis. It is credited to the savings account or can be withdrawn. No additional interest is payable for interest amount not withdrawn.
Premature withdrawal cannot be made within 6 months of opening the deposit. For withdrawals between 6 months and 1 year, post office savings account interest will be payable.
For 2,3,5 years if the FD is closed after 1 year, 2% less than the FD rates is payable for the completed years and savings interest rate for remaining months of the incomplete year.
The post office FD is refered to as TD by the post office employees. TD stands for Time Deposit. These rates are subject to be revised by the MInistry of Telecommunication from time to time.
For More Details