India Post or Department of Posts, the postal system of the country, provides a range of services. India Post, which has a network of over 1.5 lakh post offices across the country, offers several savings schemes with different interest rates. One such savings scheme offered by India Post is time deposit or fixed deposit (FD) account, according to its official website, indiapost.gov.in. Interest rate on the time deposit account is payable annually but calculated quarterly. (Also read: Post office saving schemes which offer income tax benefits)
Here are 5 things to know about post office fixed deposit account:
1. Opening of account: Post office fixed deposit account can be opened by an individual by cash or cheque. In case of a cheque, the date of realisation of cheque in government's account shall be the date of opening of account, according to India Post. The account can be opened in the name of a minor and a joint account can be opened by two adults.
2. Amount: The minimum amount required to open post office FD account is Rs. 200 and in multiple thereof. However, there is no maximum limit, noted India Post.
3. Rate of interest and tenure: The post office time deposit account offers interest in the range of 7-7.8 per cent for a period of 1-5 years. The interest rates according to India Post's website are:
|1 year time deposit (fixed deposit) account||7.00%|
|2 year time deposit (fixed deposit) account||7.00%|
|3 year time deposit (fixed deposit) account||7.00%|
|5 year time deposit (fixed deposit) account||7.80%|
4. Tax benefit: Investments made under the 5-year fixed deposit account qualifies for income tax benefits under Section 80C of the Income Tax Act, 1961, said India Post.
5. Other facilities: Nomination facility is available at the time of opening and also after opening of account. A single account can be converted into a joint account and vice-versa.