Post Office Time Deposit scheme: Features, benefits and all you need to know

Post Office Time Deposit (POTD) scheme is among the most well-known investment schemes offered by India Post.

As its name suggests, those availing this scheme can open account for a fixed duration, which, depending upon the customer’s choice, can be 12 months, 2 years, 3 years or 5 years.

Who all are eligible?

A POTD account can be opened by a single adult, or a combination of up to 3 adults. Minors above 10 years of age can also open an account, while for minors aged 10 and below, it will be opened by a guardian. POTD can also be opened by a guardian on behalf of a person with unsound mind.

Also, there’s no restriction on the number of accounts.

Features of POTD scheme

A time deposit account can only be opened with a minimum deposit of ₹1,000, which has to be in multiples of ₹100; there is no maximum limit for investment. The interest rates being offered are 5.5% (for 1 year, 2 year and 3 year accounts) and 6.7% (for 5 years).

The interest will have to be paid annually. The deposit amount, on the other hand, is repayable after the expiry of account as per the date of opening.

Other features and benefits

(1.) Those with 5 year accounts are eligible for deductions and benefits under Section 80C of the Income Tax Act, 1961.

(2.) At the time of opening, depositor can submit request for extension from the date of maturity. A 1 year account can be extended within 6 months of maturity, while the corresponding durations for the others are within 12 months (for 2 year) and within 18 months (for 3 and 5 year).

(3.) A deposit can be withdrawn only after at least 6 months from the date of deposit.

(4.) You can also transfer your TD account as security by submitting an acceptance letter signed by the person to whom it is being transferred.

(5.) Transfer can be made to these authorities/entities: President of India/Governor of the state, RBI/Scheduled Bank/co-operative bank/co-operative society, corporation/government company/local authority, and housing finance company.