POTD
Post Office Time Deposit Scheme
Post Office Time Deposit Scheme offers the facility of investing surplus funds at relatively higher rates of interest. The deposits made under this scheme for a period of 5 years are also eligible for tax benefits under section 80C of Income Tax Act.
Changes in the scheme :
- Interest Rate for deposits of various maturities increased.
Salient features of Post Office Time Deposits
| Item | Description | |||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Eligibility | Any individual singly or jointly with another adult. An adult individual on behalf of a minor. | |||||||||||||||||||||||||||||
| Minimum amount | Rs. 200/- | |||||||||||||||||||||||||||||
| Maximum amount | In multiples of Rs. 50/-. No upper limit. | |||||||||||||||||||||||||||||
| Maturity period | One year, Two years, Three years and Five years. | |||||||||||||||||||||||||||||
| Nomination facility | Available | |||||||||||||||||||||||||||||
| Interest Rate |
The interest on deposits is calculated on quarterly compounding basis and is payable annually. | |||||||||||||||||||||||||||||
| Premature withdrawal |
Allowed after expiry of six months from the date of deposit, subject to following conditions : For accounts opened upto 30.11.2011: No interest is paid for the deposit withdrawn prematurely after six months but before the expiry of one year. In case of deposits for two, three or five years withdrawn prematurely after the expiry of one year from the date of deposit, interest is payable for the completed years and months at 2% lower rate than specified for the completed period. For Accounts opened on or after 1st December 2011: Where a deposit in 1-Year, 2-Years, 3-Years or 5-Years account is withdrawn prematurely after 6 months but before expiry of one year from the date of deposit, simple interest at the rate applicable to Post Office Saving Account from time to time shall be payable. In case of deposits for two, three or five years withdrawn prematurely after the expiry of one year from the date of deposit, interest is payable for the completed years and months at 1% lower rate than specified for the completed period. | |||||||||||||||||||||||||||||
| Tax benefits | Available w.e.f. Financial Year 2007-08 i.e. Assessment Year 2008-09 for Term Deposits of 5 year. | |||||||||||||||||||||||||||||
| Interest Taxability | Taxable | |||||||||||||||||||||||||||||
| Other features | A deposit can be renewed with retrospective effect, subject to the following:
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| Agency Commission | 0.5% | |||||||||||||||||||||||||||||