- 6.9% to 7.5% interest on post office time deposits
- Investments can be made for 1 to 5 years; Interest rates are pre-determined
- Tax exemption under section 80C for a period of 5 years
Financial News: If the money is to be invested, but returns are expected to be safe, people mainly invest in FDs. But apart from FD, there is a great option available where the money is deposited with full security along with high interest. Today we are going to know in detail about Post Office Time Deposit Scheme (Post Office Time Deposit Scheme), which is also known as Post Office FD. In this scheme you can invest a lump sum amount for 1, 2, 3 or 5 years and the interest rates in this scheme are fixed in advance.
For the quarter from October to December 2026, interest is being paid from 6.9 percent to 7.5 percent. But does it have more advantages than bank FD? How much interest will be earned after depositing Rs.1 lakh? How much return over what period and what to look out for before investing? Let's see the detailed information about this.
Also Read: Mega recruitment of 15,000 teachers to take place in the state; Also Recruitment of Nursing Posts; Information of Sunetra Pawar
What is Post Office Time Deposit Scheme?
Post Office Time Deposit is a government small savings scheme. In this you deposit a lump sum and you get your principal back at the end of the chosen period. One, two, three and five year investment options are available. An account can be opened with a minimum of Rs 1000, subsequent investment can be made in multiples of Rs 100, while there is no maximum limit for investment.
The interest rates of this scheme are decided at the time of opening the account and remain applicable for the selected period. Interest is calculated every three months, but the money is paid annually. Remember that if the interest amount remains in the account, it does not earn additional interest.
How much interest will be earned after depositing Rs.1 lakh?
Post Office Time Deposit interest rates for the quarter from October to December 2026 are as follows:
- 1 Year Duration: Annual interest rate 6.9%, annual interest earned on one lakh is Rs 7,081.
- 2 years duration: Annual interest rate 7.0%, annual interest earned on one lakh is Rs 7,186.
- 3 years duration: Annual interest rate 7.1%, annual interest earned on one lakh is Rs 7,291.
- Duration of 5 years: Annual interest rate 7.5%, annual interest earned on one lakh is Rs 7,714.
This interest can be earned annually. For example, a deposit of Rs 1 lakh over a period of 5 years will earn an annual interest of around Rs 7,714. The total interest in 5 years will be Rs 38,570 and after the completion of the time period the principal amount of Rs 1 lakh will be recovered. That means the total amount will be Rs.1,38,570. This is an estimate and actual amount may vary slightly depending on account opening date and interest calculation.
Also Read: Engineering Jobs in AI Era: Not just coders, now 'these' specialized engineers are in huge demand; Getting salary of crores
How Much Tax Exemption?
One must check the scheme tenure, withdrawal rules, tax benefits and applicable interest rates before investing. Post Office Time Deposits are tax-advantaged only on accounts with a tenure of five years. Exemption can be claimed under Section 80C of the Income Tax Act on the amount deposited. However, this benefit is available only to taxpayers who opt for the old tax regime. Total investment under section 80C can be exempted up to a maximum of Rs 1.5 lakh. This does not mean that the entire earnings from this scheme are tax-free; The interest earned on the account is added to your income and may be taxed as per the applicable tax slab.
Who can open an account?
- Any Indian person can open this account in his name.
- A parent can open an account on behalf of a minor.
- A minor aged 10 years or above can open an account in his own name.
- A registered guardian account can be opened by a mentally unsound person.
- Non-Resident Indians (NRIs) cannot open new accounts in this scheme.
Important Note: If required, the account can be prematurely closed after completion of 6 months. But if you do this, you get less interest. If the account is closed within 6 months to 1 year, interest rates of Post Office Savings Account are applicable. If the account is closed for a long period of time, the prescribed deduction rules apply. So don't deposit all the money for 5 years just seeing high interest. Avoid investing all the savings in a single period, keeping in mind that the money may be needed in the future or in an emergency.