The Post-Office Term Deposit (POTD) Scheme is an investment savings account scheme offered by the India Post (Department of Posts). Post office fixed deposit is another name for the post office time deposit. The plan gives a guaranteed return to the depositor who makes a fixed-length deposit.
Any person who is an Indian citizen may open a POTD account. Cash or a cheque may be used to open the account. The account’s opening date is listed as the day the cheque was realised.
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The minimum amount required to open such an account is Rs. 1,000. There is no cap on the maximum limit of the amount that can be deposited. The account can also be opened jointly by a maximum of three persons. An individual can create multiple accounts without any restriction. He/she has the freedom to transfer his/her account from one post office to another within India.
Lock-in period: One might choose to lock in their money for one, two, three, or five years. A formal application can be sent to the post office to prolong the term.
Interest Rate: This program’s interest rate is periodically updated. The annual payment is made after a quarterly calculation. The following are the most recent POTD rates as of the second quarter of the fiscal year 2021–2022:
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- 1 Year = 5.5%
- 2 Years = 5.5%
- 3 Years = 5.5%
- 5 Years = 6.7%
Exemption from Tax: The depositors can also claim the income tax exemptions worth Rs. 1.5 lakh under Section 80C of the Income Tax Act, 1961. However, these exemptions are available only for the lock-in period of five years.
