Scheme Overview
The Post Office Time Deposit is the government's answer to a bank fixed deposit—a lump-sum deposit for a fixed term with a sovereign guarantee behind it. It is a useful option when you want assured returns without depending on any single bank's health.
- Interest rate:
- 1-year: 6.9%
- 2-year: 7%
- 3-year: 7.1%
- 5-year: 7.5%
Interest is calculated quarterly but paid annually. - Minimum / Maximum deposit: ₹1,000 minimum, in multiples of ₹100; no upper limit.
- Tenure: 1, 2, 3, or 5 years.
- Premature withdrawal: Not allowed within the first 6 months. If closed after 6 months but before 1 year, only the post office savings account rate is paid.
- Eligibility: Resident individuals (single or joint), minors via guardian, and minors aged 10+ in their own name.
- Tax benefit: Only the 5-year Time Deposit qualifies under Section 80C. Interest is taxable in all tenures. The deposit can be pledged as security.
- Payout: Annual interest payout; principal returned at maturity.
Government Schemes — At a Glance
| Scheme | Rate (p.a.) | Tenure | Max Deposit | Eligibility | Early Closure | Tax Benefit | Payout |
|---|---|---|---|---|---|---|---|
| 7.10% | 15 yrs | ₹1.5L / year | Residents | Conditional | Yes | At maturity | |
| 8.20% | 21 yrs | ₹1.5L / year | Girl child | Conditional | Yes | At maturity | |
| 8.20% | 5 + 3 yrs | ₹30 lakh | Age 60+ | Yes | Yes | Quarterly | |
| 7.70% | 5 yrs | No limit | Residents | No | Yes | At maturity | |
| 7.50% | 1–5 yrs | No limit | Residents | Yes | Yes | Annual | |
| 6.70% | 5 yrs | No limit | Residents | Yes | No | At maturity | |
| 7.40% | 5 yrs | ₹9L / ₹15L joint | Residents | Yes | No | Monthly | |
| 7.50% | 115 months | No limit | Resident | Yes | No | At maturity |
Interest rates are for the July–Sept 2026 quarter and are revised quarterly by the Ministry of Finance. This is for educational purposes and is not investment or tax advice — verify current figures on India Post or NSI before investing.
Frequently Asked Questions
For the July–September 2026 quarter, Post Office Time Deposit rates are 6.9% (1 year), 7.0% (2 years), 7.1% (3 years) and 7.5% (5 years) per annum. Interest is calculated quarterly and paid annually. Rates are revised each quarter, so check the latest on vikalp.io.
A Post Office Time Deposit is available for 1, 2, 3 or 5 years. The 5-year deposit carries the highest rate and is the only tenure eligible for a tax deduction. The rate is fixed for your chosen term once the deposit is booked.
The minimum is ₹1,000, in multiples of ₹100, with no upper limit. This makes it accessible to small savers while also suiting large deposits, all backed by a sovereign guarantee rather than a single bank's balance sheet. Accounts can be held singly or jointly.
Premature withdrawal is not allowed within the first 6 months. If you close after 6 months but before completing 1 year, only the lower Post Office Savings Account rate is paid instead of the deposit rate. The terms tighten the earlier you exit.
Only the 5-year Post Office Time Deposit qualifies for a Section 80C deduction under the old tax regime. The 1, 2 and 3-year deposits offer no tax benefit. In every tenure, the interest earned is fully taxable at your income-tax slab.
Interest is calculated quarterly but paid annually to your account, with the principal returned at maturity. If the annual interest is not withdrawn, it does not earn further interest. The 5-year deposit can also be pledged as security for a loan.