The National Savings Time Deposit Account (TD), also known as the Post Office Fixed Deposit (FD), is considered a secure savings scheme offered by India Post. It requires an initial investment of Rs. 1,000 and has no upper limit, with returns guaranteed for terms of 1, 2, 3 and 5 years. Due to its dependability, accessibility and provision of tax incentives under Section 80C of the Income Tax Act, this program is highly preferred, especially in rural regions.
Interest Rates & Maturity Amount Across Tenures
Here are the maturity amounts for investments of Rs 5 lakh, Rs 10 lakh, and Rs 15 lakh.
1-year Post Office FD:
6.9% interest is available on the 1-year Post Office FD. Additionally, if you put Rs 5 lakh in this FD, you would earn Rs 35,403 in interest over a year, for a total of Rs 5,35,403 at maturity. The interest on an investment of Rs 10 lakh will also accumulate Rs 70,806, therefore the total amount at maturity will be Rs 10,70,806. The interest earned on an investment of Rs 15 lakh will be Rs 1,06,209, and after one year, the maturity amount will be Rs 16,06,209.
2-year Post Office FD:
The yearly interest rate on the 2-year Post Office Fixed Deposit is 7.0%. A Rs 5 lakh investment in this FD would earn Rs 74,441 in interest over two years, for a maturity amount of Rs 5,74,441. For a Rs 10 lakh investment, the interest received will be Rs 1,48,882, with a maturity of Rs 11,48,882. Investing Rs 15 lakh will earn Rs 2,23,323 in interest, with a total maturity value of Rs 17,23,323 at the conclusion of the two-year period.
3-year Post Office FD:
In the 3-year Post Office FD, which offers an interest rate of 7.1%, a Rs 5 lakh investment will accumulate Rs 1,17,538 in interest resulting in a maturity amount of Rs 6,17,538. For a Rs 10 lakh investment, the interest received will be Rs 2,35,075 with a maturity of Rs 12,35,075. With a three-year maturity of Rs 18,52,613, an investment of Rs 15 lakh will yield interest of Rs 3,52,613.
5-year Post Office FD:
The 5-year Post Office FD offers the highest interest rate at 7.5% annually. A Rs 5 lakh investment in this FD will yield Rs 2,24,974 in interest over the five-year term resulting in a maturity amount of Rs 7,24,974. Investing Rs 10 lakh will accrue Rs 4,49,948 in interest leading to a maturity amount of Rs 14,49,948. A Rs 15 lakh investment will generate Rs 6,74,922 in interest with a maturity amount totalling Rs 21,74,922 at the end of the 5 years.
Taxation Benefits
Post Office Time Deposit (POTD) investments do not involve any tax deduction at source (TDS). However, the interest earned is added to the depositor’s annual income and taxed accordingly. The 5-year POTD qualifies for a tax deduction under Section 80C of the Income Tax Act, allowing deductions up to Rs 1.5 lakh. For those under 60, interest earned is taxable. For senior citizens (60+), interest up to Rs 50,000 is tax-exempt annually. The key benefit of the 5-year POTD is its eligibility for tax deductions under Section 80C making it an attractive option for tax-saving investments.
