Post Office Time Deposit Account (TD) / Post Office Fixed Deposit Account (FD)

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Post Office Time Deposit Account (TD) - A Secure Investment Option

1. Introduction

Post Office Time Deposit Account (TD) is a popular investment scheme offered by India Post, providing a secure and reliable way to grow your savings. It is suitable for individuals of all age groups and comes with various tenure options to match your financial goals.

2. Who Can Open a Post Office Time Deposit Account?

The Post Office Time Deposit Account can be opened by the following individuals:

(i) Single Adult: Any adult individual can open a TD account in their name.
(ii) Joint Account: Up to three adults can jointly open a TD account with Joint A or Joint B holding.
(iii) Guardian on Behalf of Minor: A legal guardian can open a TD account for a minor.
(iv) Guardian on Behalf of a Person of Unsound Mind: A guardian can open an account on behalf of a person of unsound mind.
(v) Minor Above 10 Years in His Own Name: A minor above 10 years of age can open a TD account in their own name.

Note:- Any number of account can be opened.

3. Deposits and Interest

The Post Office Time Deposit Account offers the following features related to deposits and interest:

(i) Account Types for 1 Year, 2 Years, 3 Years, 5 Years: TD accounts are available with different tenure options.
(ii) Minimum and Maximum Deposit Limits: The account can be opened with a minimum of Rs. 1000 and in multiples of Rs. 100. There is no maximum limit for investment.
(iii) Annual Interest Payment: Interest payable annually but calculated quarterly.
(iv) Crediting Interest to Savings Account: The account holder can choose to credit the annual interest to their savings account by submitting an application.
(v) Tax Benefits under Section 80C: The investment in a 5-year TD account qualifies for the benefit of Section 80C of the Income Tax Act, 1961.

4. Maturity of the Time Deposit Account

The deposit amount in the Post Office Time Deposit Account is repayable after the expiry of the selected tenure, which can be 1 year, 2 years, 3 years, or 5 years, from the date of opening the account.

5. Extension of Account

On maturity, the depositor may further extend the TD account for another tenure for which the account was initially opened.

The TD account can be extended from the date of maturity within the following prescribed period:

1 Year TD: Within 6 months of maturity
2 Year TD: Within 12 months of maturity
3/5 Year TD: Within 18 months of maturity

At the time of opening the account, the depositor can submit a request for the extension of the account from the date of maturity.

The TD account can be extended after maturity by submitting the prescribed application form at the concerned Post Office along with the passbook. The interest rate applicable to the respective TD account on the day of maturity shall be applicable to the extended period.

6. Premature Closure of Account

No deposit shall be withdrawn before the expiry of six months from the date of deposit.

If the TD account is closed after 6 months but before 1 year, the PO Savings Account interest rate will be applicable.

If a 2/3/5-year TD account is prematurely closed after 1 year, the interest shall be calculated 2% less than the TD interest rate (i.e., 1/2/3 years) for completed years, and for the part period less than a year, PO Savings Account interest rates will be applicable.

The TD account can be closed prematurely by submitting the prescribed application form with the passbook at the concerned Post Office.

7. Pledging of TD Account

A TD account may be pledged or transferred as security by submitting the prescribed application form at the concerned Post Office, supported with an acceptance letter from the pledgee.

The transfer or pledging can be made to the following authorities:

The President of India/Governor of the State
RBI/Scheduled Bank/Co-operative Society/Co-operative Bank
Corporation (public/private)/Govt. Company/Local Authority
Housing finance company

Disclaimer: The information provided in this blog post is for general informational purposes only and should not be considered as professional advice. The schemes features, rules, and regulations may be subject to change, and readers are encouraged to verify the latest information from official sources or consult financial experts before making any investment decisions. The author and the website shall not be held liable for any losses or damages arising from the use of the information provided in this blog post.