This Term Deposit Saving Scheme From Post Office Is Offering 6.7% Interest

All major banks in India offers the customers an option of opening an FD with a good interst rates. If you are looking for othe rtahn bank FD, you can look at post office FDs. Investors have the option to invest in the post office and earn a good return, might be better than some bank FDs.

You have the option to park your money in Post Office Time Deposits (POTD), it is often considered a safe option for FDs. POTD attracts a quarterly revision of rates. The POTD is similar to a bank fixed deposit, where you save money for a definite time, earning a guaranteed return through the tenure of the deposit. At the end of the deposit's tenure, the maturity amount comprises the capital deposited and the interest it earns.

Depositors can opt to keep their money invested in Post Office term deposits for 1 to 5 years, just like they can with bank FDs. The Post Office offers a 5.5% interest rate on despoit from one to three years. The interest rate on a 5-year term deposit account is 6.7%.

Post Office Time deposit interest rates

Period	Rate
1 year	5.50%
2 year	5.50%
3 year	5.5​%
5 year	6.7​ %

The POTD is not inflation-protected, which implies that anytime inflation exceeds the promised interest rate, the scheme's return is worthless. When inflation is below the promised return, however, a positive real rate of return is achieved.

Post Office Time Deposit- Other Details

Eligibility - You need to be a resident Indian, preferably with a post office saving bank account. You can open the account at any head or general post office.

Deposits - A minimum of Rs. 1000 and multiples of Rs. 100 are required to open an account. There is no maximum investment amount. Interest is paid once a year, and no further interest will be paid on interest that has been due for payment but has not been withdrawn by the account holder. The yearly interest will be credited to the account holder's savings account.

The pre-mature closer of account - You can not withdraw the deposited amount before the expiry of six months after the date of deposit. POTD Account Interest Rate will apply if the account is closed after 6 months but before 1 year. If a 2/3/5 year TD account is prematurely closed after 1 year, interest will be computed at 2% less than the TD interest rate for 1/2/3 years for completed years, and for a part period less than a year, PO Savings Interest rates will be applicable.

Taxation - Deposits having a term of fewer than five years do not qualify for a tax break. The five-year deposit is eligible for a Section 80C tax deduction on the amount deposited.