Post office time deposits are available for periods ranging from 1 year to 5 years. The current rate for a one-year deposit is 6.25%.
Interest payments are made annually. Investors have an exit option within six months without receiving any interest. There is a one-year lock-in for exit with interest. A penalty of 2 per cent is deducted from the relevant rate in case of premature withdrawals.
Interest income from this scheme is eligible for tax benefits. So if you are a short to medium-term investor looking for an annual interest income along with flexible investment tenure, time deposits are suitable for you.
How do I invest in a Time Deposit?
A Time Deposit account can be opened at any post-office.
What is the minimum investment for a Time Deposit?
The minimum investment in a Time Deposit could be as low as Rs.50. There is no upper limit on investment.