Is it Good for you to invest in Post Office Time Deposit?

Post Office Time Deposit 

India Post, the trademark of the Department of Posts, has been operational since 1854. With more than 1.55 lakh offices all through India, it is the most broadly disseminated post network on the planet. 

Aside from conveying sends, India Post offers the accompanying -

• Small savings schemes. 
• Postal Life Insurance and Rural Postal Life Insurance. 
• Moment money order. 
• Electronic money order. 
• Mutual funds. 
• Money transfer administrations. 

Under small savings schemes, post office offers the time deposit or National Savings Time Deposit Account. It is like a bank fixed deposit with a couple of natural contrasts. 

Individuals can open a time deposit account by visiting the closest post office or by utilizing the official website or application of India Post. 

Highlights of Post Office Term Deposit Scheme 

Not many of the imperative insights about interest in the post office term deposit are as per the following - 

1. Eligibility and shared services 

Any person over the age of 10 can open a time deposit account at any post office. Further, gatekeepers can open a record for a minor. In any case, the minor needs to apply for responsibility for account after the person in question arrives at the essential age. 

Records can likewise be held mutually by up to 3 individuals. Depositors can likewise assign an individual previously or in the wake of opening a record. 

One of the essential benefits of post office time deposits is that individuals can make various records with no limitation. Depositors additionally have the freedom to transfer their records starting with one post office then onto the next. 

2. Various lock-in periods 

Depositors get the alternative to open a time deposit represent 1, 2, 3, and 5 years. In any case, account residency can be stretched out by giving a conventional application to the post office. 

3. Income tax benefits 

Income tax benefits are accessible just for a 5-year post office time deposit account. Depositors will have the option to guarantee income tax exemptions of up to Rs.1.5 lakh under Section 80C of the Income Tax Act, 1961. 

4. Worthwhile returns 

The rates of interest relevant on a National Savings Time Deposit Account is recorded beneath -

Tenure   Rate 

1 year      5.5% 

2 year      5.5% 

3 year      5.5% 

5 year       6.7% 

Consider the accompanying guide to comprehend the returns better - 

Mrs. Vyas puts Rs.5,000 in four post office time deposit schemes of 1 year, 2 years, 3 years, and 5 years each. According to the predominant rates, she will acquire - 

Rs.5,281 following 1 year. 

Rs.5,578 following 2 years. 

Rs.5,891 following 3 years. 

Rs.6,970 following 5 years. 

Amendment and assurance of rates 

The post office term deposit interest rate is amended each quarter by the Government of India. The interest is determined quarterly and paid every year. 

This rate is resolved dependent on the yields on government protections (G-secs). A spread of 25 bps or 0.25% is added to 5-year time deposits well beyond the G-sec yield. Nonetheless, 1-year, 2-year, and 3-year time deposits don't convey such spreads. 

Transfer of rates to different records 

The interest can be transferred to the depositor's post office savings account with a similar post office. 

Same way, it can be transferred to the depositor's National Savings Recurring Deposit Account or 5-year post office repeating deposit account as the whole year's deposit. RD account holders should make a conventional application consistently before the time deposit interest is attributed for this transfer to measure. 

Payment of interest 

The interest, alongside the head, will be paid either in real money or check. Be that as it may, payments higher than Rs.20,000 might be made with a check. 

Pertinence of interest post maturity 

The individuals who don't pull back the whole after the maturity of a time deposit record won't get any extra interest. Notwithstanding, on account of post offices with center financial arrangements, the time deposit will get restored for a similar period it was initially made. The post office time deposit interest rate at the time of maturity will be relevant after recharging. 

5. Low least deposit amount 

The base amount needed to open a National Savings Time Deposit Account is Rs.1,000. Individuals can deposit in products of Rs.100 thereof. There is no restriction for most extreme speculation. 

Individuals can make the underlying deposit in real money or check. On the off chance that the payment is made with a money order, the date of encashment will be set as the record opening date. 

6. Untimely withdrawal 

A National Savings Time Deposit Account doesn't permit untimely withdrawal inside the initial a half year. The post office term deposit rate if the corpus is rashly pulled back between a half year and a year will be in adherence to the rate endorsed for a savings account. 

Post Office Time Deposit versus Bank Fixed Deposits 

Despite the fact that the Time Deposit Scheme bears similitude with bank FDs, they contrast as for a few boundaries. These distinctions are represented in the table underneath – 

Particulars                                            Time deposit                             Fixed deposit 

Pace of interest                                        5.5% to 6.7%                      5.5% to 6.5% (normal) 

Extra interest for senior citizens                    No                                     0.25% to 0.5% 

Interest payment frequency                         Yearly                         Monthly, quarterly, or yearly. 

Lock-in period                                          1 to 5 years.                         7 days to 10 years. 

Auto-renewal                                Only after earlier application                                                                                                                or if there should arise an occurrence 

                                         of post offices with center banking solutions.           Yes 

Credit against the deposit                                NA                 Available from certain banks and NBFCs. 

Untimely withdrawal                              After 6 months.             Available any time with certain                                                                                                                             monetary foundations. 

Pertinence of tax deducted at source (TDS)    No                                             Yes 

Post Office Time Deposit versus Other Post Office Savings Schemes 

The post office offers a few different schemes that can introduce rewarding venture open doors for individuals. Following is a gander at the contrasts between a Time Deposit Scheme and that of the other speculation choices offered by the Post Office. 

Product                   Rate of interest       Tenure       Premature withdrawal       Income tax benefits                                                                                                                                      under Section 80C 

Time deposit             5.5% to 6.7%       1 to 5 years           After 6 months              Only on 5-year time                                                                                                                                                   deposit 

Repeating deposit           5.8%                  5 years                After 3 years                            Yes 

Monthly Income             6.6%                  5 years      After 1 year yet before 3 years 

     Scheme                                                                           /following 3 years                      No 

Sukanya Samriddhi       7.6%        Until the young lady                                                       Yes                            Account                                 arrives at 21 years old                                                                                                                                        or weds after 18.     After the young lady                                                                                                                                   arrives at 18 years of age. 

Public Provident Fund  7.1%                  15 years                 After 5 years                           Yes 

Account

Senior Citizen Savings 7.4%                   5 years                  After 1 year         Yes; TDS is appropriate          Scheme                                                                                                          if interest gained is more                                                                                                                                       than Rs.50,000. 

National Savings           6.8%                  5 years         Allowed if there should be               Yes                                                                                                   an occurrence of  the declaration                                                                                                         holder's demise or by means of a court order.     

Given that the states of a Time Deposit Scheme are appropriate for a transient venture, with the guarantee of ensured returns, it makes for a productive road to stop one's speculation corpus.