What is Post Office Time Deposit? MintGenie explains

The put up workplace time deposit is also called put up workplace fastened deposit (POFD). It is just like the fastened deposit (FD) facility of banks. This scheme is obtainable by the India Post. The scheme offers a assured return to the depositor who deposits an quantity for a hard and fast time frame.

Opening a POTD account

POTD accounts may be opened by any particular person who’s a citizen of India. The account may be opened with both money or cheque. The date of realization of cheque is recorded because the opening date of the account.

The minimal quantity required to open such an account is Rs. 1,000. There isn’t any cap on the utmost restrict of the quantity that may be deposited. The account can be opened collectively by a most of three individuals. An particular person can create a number of accounts with none restriction. He/she has the liberty to switch his/her account from one put up workplace to a different inside India.

Lock-in interval

One can lock of their cash for a interval of both one, two, three, or 5 years. The tenure can be prolonged by sending a proper software to the put up workplace.

Interest charge

The rate of interest underneath this scheme is revised recurrently. It is calculated on a quarterly foundation and paid on an annual foundation. The newest revised charges for the POTD as per the second quarter of the monetary 12 months 2021-22, are as follows:

1 Year = 5.5%

2 Years = 5.5%

3 Years = 5.5%

5 Years = 6.7%

Tax exemption

The depositors may declare the revenue tax exemptions price Rs. 1.5 lakh underneath Section 80C of the Income Tax Act, 1961. However, these exemptions can be found just for the lock-in interval of 5 years.

Withdrawal earlier than the maturity interval

The depositor just isn’t allowed to withdraw cash inside six months of the deposit. If the corpus is withdrawn prematurely between six months and 12 months, then the speed of curiosity provided would be the charge prescribed for a financial savings account.

The post-office time deposit is greatest suited for individuals who don’t possess a high-risk urge for food.

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