Post Office Time Deposit accounts are short-term investment avenues offering guaranteed fixed income. Account holders can choose a lock-in period of one, two, three, and five years, offering 6.9, 7.0, 7.1, and 7.5 per cent, respectively, as per their preference. The interest is paid annually but calculated quarterly. The minimum investment is Rs 1,000; after that, in multiples of Rs 100. The account has no defined maximum limit; investors can invest as per their goals.

Eligibility

One can open an individual or a joint account with up to three adult members. Children older than 10 can also open an account, provided they are under the supervision of an adult member. 

One can also easily open multiple accounts and help people achieve their financial goals. 

Also Read: Post Office Small Savings Schemes: Know The Interest Rates And Key Features

Tenures

The Post Office Time Deposit accounts have different maturities to choose from. For example, it allows deposits for one, two, three, and five years. The minimum deposit amount is Rs 1,000; after that, multiples of Rs. 100. However, there is no maximum limit. The accumulated fund will not accrue extra interest if the interest or principal amount is not withdrawn after maturity. Account holders also have the option to receive the interest annually. A Post Office Time Deposit account for five years also offers tax relief under Section 80C of the Income-tax Act, 1961. 

Also Read: Post Office Recurring Deposit: All You Need To Know

Premature Exit

A premature exit is allowed in a term deposit account under certain conditions. No withdrawals are permitted before six months from the date of deposit. If the term deposit account is closed after six months but before a year, the applicable interest rate will be that of a Post Office Savings Account. If the account is closed prematurely after a year but within two, three, or five years, the interest will be reduced by 2 per cent from the term deposit interest rates for the completed years. The PO Savings Account rates are applicable for time deposits less than a year. Closure requires submitting a prescribed application form and the passbook at the relevant post office.