Post Office Fixed Deposit Rates (FD) || Latest Updated 2020:
Post Office is not only useful for delivering the mails and couriers but they are also useful for providing the Fixed Deposit and various saving option for the investment purpose to the individuals.
From this article on, “Post Office Fixed Deposit Rates” you will get the clear idea about the interest rates and different aspects that the individual should know while making the investment in fixed deposit.
Most of the individual consider Fixed Deposit as the easiest method of making the investment and to earn interest on it.
Post Office Fixed Deposit Rates
India post office fixed deposit schemes offers a variety of attractive returns on investment that will depend on the maturity tenure selected by an investor.
The investment tenure range between 1 and 5 years.
The table that is seen below mentions the interest earnings based on the different investment tenure.
|Tenure||Non-senior citizen and NRO FD (%)||Senior citizen FD (%)|
|1 Year||6.90% per annum||NA|
|2 Year||6.90% per annum||NA|
|3 Year||6.90% per annum||NA|
|5 Year||7.70% per annum||NA|
Post Office fixed deposit schemes do not offer any additional interest to the senior citizens.
Henceforth, the interest earnings on a particular sum are the same regardless of whether the investor is over or under 60 years of age.
Different Types of Post Office FD Schemes
Currently, Post Office offers just one FD scheme, which is, Post Office Time Deposit.
In this kind of scheme, it is kept suitable for all types of India society that resides in India with a minimum amount of investment of Rs 100.
In opening the FD’s in post office there is no upper limit on the investment.
As there is no limitations, the investors can easily select the tenure for their investment in Post office which can in a range from 12 months till the maximum time limit of 60 months.
The investors also get a facility to take loans against their FD’s which helps them to use the fund to settle down their credit using this as their emergency expenses.
Also added services are also provided to them by canceling their investment in the midway in their tenure if there is any necessity.
Benefits of Choosing Post Office Fixed Deposit
Postal fixed deposit, also known as Post Office Time Deposit (POTD) and this is often the preferred mode of investment for many individuals.
Investors can get the following benefits from such FDs-
- Returns guaranteed – Due to the government backing, a Post Office fixed deposit scheme is safer and more secure than FD options from other financial institutions.
- Reasonable interest rate – When compared to other investment schemes, post Office FD investment is more likely to result in higher returns.
- No volatility – While the market experiences periodic ups and downs, neither affects the returns from POTD. With this, it states that the investors can earn the same interest irrespective of the market conditions.
- Other facilities – Eligible investors can avail tax exemptions on interest earnings from such schemes. They can also avail the facility to withdraw their invested sum prematurely and also to get the loans against their FD plan.
Eligibility Criteria for Post Office FD
The following individuals are eligible to get the facility of a Postal fixed deposit–
In India, the residents can manage such investments, either individually or jointly.
The minors are also eligible for Post Office fixed deposit scheme investments as well that need to be managed by their legal guardian.
NRIs, trusts, companies and other organizations, however, are not allowed to avail fixed deposit investments through Post Office.
Documents Required for Post Office FD
Investors need to have the following documents to open their deposit in the POTD scheme –
- Proof of Address
- Telephone bill
- Electricity bill
- Bank statement inclusive of cheque
- Post Office issued ID or certificate
- Proof of Identity
- Voter ID
- Pan card
- Aadhaar card
- Driving license
- Photo ration card
Moreover, there is also a need for the investor to provide details of a nominee for the FD.
A witness should be present when he/she signs the investment papers.
Premature Withdrawal Terms and Conditions
The facility for premature withdrawal is accessible to India Post FD investors.
However, while ending the investment before its maturity term, here are some aspects that they should keep in mind.
For the premature withdrawal, there is a necessity that the investment have to complete at least 6 months to avail this benefit.
However, the principal amount will be returned to the investor by adding the simple interest as per the post office savings account interest rate by their authority.
As per the scheme of the Post Office FD with tenures of 2 years and above there will be 1% reduction in the proposed interest rates that is made before distributing the funds to the individuals.
Special Forms to Fill
To avail tax waivers on total interest income of up to Rs. 40,000, investors need to fill Form 15G and 15H (up to Rs. 50,000) for general and senior citizens respectively.
When there is a failure to submit these forms, it will result in giving up the applicable TDS and FD earnings for a year.
Loan against Post Office Fixed Deposit
Post Office fixed deposit schemes offers these customers to get the loans against the value of their FDs.
Being a hassle-free source of funding, this kind of loans also come with some reasonable interest rates that limit the financial burden on the investor
From this blog on “Post Office Fixed Deposit Rates” I hope that you get an idea regarding the benefits and rates of the Fixed Deposit rates.
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