From April 1, 2023, 7.5 percent interest is being received annually on the Post Office Time Deposit Account of 5 years. In this scheme, interest rates are paid on an annual basis. However, the interest is compounded on a quarterly basis. In the 5-year term deposit scheme of the post office, the account holder also gets the benefit of tax deduction up to 1.5 lakhs under section 80C of income tax.

Apart from 5 years, you can invest in post office term deposits with maturity of 1, 2 and 3 years. In this scheme, after maturity, the deposit option is available again for the same period.

Post Office: Guaranteed 10 lakhs on lump sum deposit of 5 lakhs

The customer is getting 7.5 percent interest from April 1, 2023, on 5-year FD in the post office. According to the Post Office FD Calculator 2023, if a deposit of Rs 5 lakh is made, then the regular customer will get Rs 7,24,974 on maturity. In this, Rs 2,24,974 will be earned from interest. After maturity, this scheme can be extended for five more years. In this way, a lump sum deposit of Rs 5 lakh will grow to Rs 10,51,175 in 10 years. In this, there will be an income of Rs 5,51,175 from interest. That is, in 10 years, your investment here is guaranteed to double.

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Post Office TD: Review of interest rates every quarter

Single account and joint account are also opened under post office time deposit. A maximum of 3 adults can be included in a joint account. This account can be opened with a minimum of Rs 1000. After this you can invest in it in multiples of Rs.100. There is no investment limit in Post Office TD. The Finance Ministry reviews the interest rates on small savings every quarter.

Post Office TD: Benefit of tax deduction

The benefit of tax exemption is available on 5 years FD in the post office. Tax deduction can be claimed on investment up to Rs 1.5 lakh under section 80C of income tax. Keep in mind here that the amount received on maturity in FD is taxable. Post Office TD is getting 6.8 percent interest for 1 year, 6.9 percent for 2 years and 7.0 percent for 3 years. In this scheme, the interest rates are calculated on a quarterly basis, but the payment is done on an annual basis.

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What is the return in India Post Term Deposit

India Post Term Deposits (POTDs), colloquially also known as Post Office Fixed Deposits, have been extremely popular across the country for decades. The reach of the post office has also been in those areas of the country where banking facilities were less available. Being directly linked to the central government, the post office has also been considered the safest option for investment. Also, there is a good return on investment in the post office.

Special Features of Post Office Term Deposit

Term deposits in the post office can be made for 1 year, 2 years, 3 years or 5 years. A minimum of Rs 1000 can be deposited in this, after which any amount can be deposited in multiples of Rs 100. There is no maximum deposit limit. At present, 5.5 percent interest is being given in the post office on term deposits from 1 year to 3 years. While depositing for 5 years will get 6.70 percent interest.

The special thing is that the amount deposited in the post office term deposit can also be withdrawn after 6 months if needed. But in that case, only the interest paid on the Post Office Savings Accounts (POSA) will be available on the deposited amount, which is currently 4 percent per annum. Tax exemption is also available under section 80C of Income Tax on making a term deposit for 5 years.

Fixed deposits of banks 

You can also invest in fixed deposits of banks instead of post office. The rate of interest offered on FD of each bank is different. Usually, banks also levy a penalty for premature withdrawal of FD deposits, which usually ranges from 0.5 per cent to 1 per cent of the interest rate applicable on FDs. For your ease, here we are giving the current FD rates of some major banks. These rates are taken from the websites of these banks. For all banks, we have given here the interest rates applicable on deposits below Rs 2 crore.

SBI FD Rates

• State Bank of India (SBI) is offering 5.60% interest on FDs ranging from 3 years to less than 5 years. In case of senior citizens, the interest rate is 6.10%.
• State Bank of India (SBI) is giving 5.65% interest on FDs ranging from 5 years to 10 years. In case of senior citizens, the interest rate is 6.45%.

HDFC Bank FD Rates  

• HDFC Bank is giving 6.10% interest on FDs ranging from 3 years 1 day to 5 years. In case of senior citizens, this interest rate is 6.60%.
• HDFC Bank is giving 5.75% interest on FDs ranging from 5 years 1 day to 10 years. In case of senior citizens, this interest rate is 6.50%.

ICICI Bank FD Rates 

• ICICI Bank is giving 6.10% interest on FDs ranging from 3 years 1 day to 5 years. In case of senior citizens, this interest rate is 6.60%.
• ICICI Bank is giving 5.90% interest on FDs ranging from 5 years 1 day to 10 years. In case of senior citizens, this interest rate is 6.60%.

Axis Bank FD Rates

• Axis Bank is offering 5.70% interest on FDs with tenures ranging from 3 years to less than 5 years. In case of senior citizens, the interest rate is 6.35%.
• Axis Bank is giving 5.75% interest on FDs ranging from 5 years to 10 years. In case of senior citizens, the interest rate is 6.35%.

YES Bank FD Rates

• Yes Bank is offering 6.75% interest on FDs ranging from 18 months to less than 3 years. In case of senior citizens, this interest rate is 7.25%.
• Yes Bank is giving 6.75% interest on FDs ranging from 3 years to 10 years. In case of senior citizens, this interest rate is 7.50%.

It is clear from the above information that Axis Bank is currently paying the highest interest on FDs in these banks. But the investment decision in FD cannot be made on the basis of high returns only. Issues like the safety of investment to guarantee of returns are also very important. Post office term deposits and SBI FDs can be considered the safest as they are linked to the government. The safety of investments made in private sector banks depends on the financial strength of that bank. In such a situation, any investment decision should be taken keeping all the things in mind.

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