Understanding Post Office FD Rate: The Post Office Time Deposit Account (TD) – one of the several types of guaranteed-income small savings schemes offered at the post offices in the country – is essentially a fixed deposit scheme offered by a commercial bank wherein interest is compounded quarterly but paid annually. Currently, the Post Office FD account comes in four maturity options, ranging from one year to five years and yielding annual returns of 6.9 per cent to 7.5 per cent per annum calculated quarterly, according to the India Post website, indiapost.gov.in. A post office fixed deposit can be set up with a minimum investment of Rs 1,000, with no upper limit, in multiples of Rs 100. For instance, deposit amounts such as Rs 1,100 and Rs 9,900 are acceptable for investing in the post office TD scheme, but not Rs 1,110 and Rs 9,990.
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Post Office 1-Year, 2-Year, 3-Year, 5-Year TD Interest Rates
| Period | Rate |
|---|---|
| One year | 6.9% |
| Two years | 7.0% |
| Three years | 7.1% |
| Five years | 7.5 % |
Now, here are some examples to understand these returns better.
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Example 1 | How a sum of Rs 1 lakh grows in all four options in the Post Office FD small savings scheme
| Maturity | Interest Earned | Principal Amount | Total Value |
| One year | Rs 7,081 | Rs 1,00,000 | Rs 1,07,081 |
| Two years | Rs 14,888 | Rs 1,00,000 | Rs 1,14,888 |
| Three years | Rs 23,507.5 | Rs 1,00,000 | Rs 1,23,507.5 |
| Five years | Rs 44,995 | Rs 1,00,000 | Rs 1,44,995 |
Example 2 | How a sum of Rs 20,000 grows in all four options in the Post Office FD small savings scheme
| Maturity | Interest Earned | Principal Amount | Total Value |
| One year | Rs 1,416 | Rs 20,000 | Rs 21,416 |
| Two years | Rs 2,978 | Rs 20,000 | Rs 22,978 |
| Three years | Rs 4,701.5 | Rs 20,000 | Rs 24,701.5 |
| Five years | Rs 8,999 | Rs 20,000 | Rs 28,999 |
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Example 3 | How a sum of Rs 5,000 grows in all four options in the Post Office FD small savings scheme
| Maturity | Interest Earned | Principal Amount | Total Value |
| One year | Rs 354 | Rs 5,000 | Rs 5,354 |
| Two years | Rs 744 | Rs 5,000 | Rs 5,744 |
| Three years | Rs 1,175 | Rs 5,000 | Rs 6,175 |
| Five years | Rs 2,250 | Rs 5,000 | Rs 7,250 |
The calculated figures given above are for illustrative purposes only, based on the prevailing interest rates.
