Post Office Time Deposit Accounts 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.
|Eligibility||Any individual singly or jointly with another adult.|
An adult individual on behalf of a minor.
|Minimum amount||₹ 200/-|
|Maximum amount||In multiples of ₹ 200/-. No upper limit.|
|Maturity period||One year, Two years, Three years and Five years.|
|Auto Renewal||A deposit account opened in a Post Office working on CBS platform shall be automatically renewed on maturity, for the same period it was opened initially at the rate of interest prevailing on date of such renewal.|
|Interest Compounding||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For accounts opened upto 30.11.2011: No interest is paid for the deposit withdrawn prematurely after six months but before the expiry of one year.
In case of deposits for two, three or five years withdrawn prematurely after the expiry of one year from the date of deposit, interest is payable for the completed years and months at 2% lower rate than specified for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Where a deposit in 1-Year, 2-Years, 3-Years or 5-Years account is withdrawn prematurely after 6 months but before expiry of one year from the date of deposit, simple interest at the rate applicable to Post Office Saving Account from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In case of deposits for two, three or five years withdrawn prematurely after the expiry of one year from the date of deposit, interest is payable for the completed years and months at 1% lower rate than specified for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 for Term Deposits of 5 years|
|Interest Taxability||With effect from 1st April 2018 (AY 2019-20) Senior Citizens (i.e. Residents aged 60 years or above) are eligible for exemption of interest income from Bank / Post Office deposits (Saving accounts / Time deposits / RD accounts) upto ₹ 50,000/- under Section 80TTB. (They are, however, not eligible for rebate under section 80TTA.)
Account holder other than Senior Citizens are not eligible for any exemption.
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