Post Office Fixed Deposit Interest Rates 2023


5 min read

Updated on Apr 30, 2023

Fixed Deposits or FDs are the most common way of saving money, isn’t it? Our parents still consider FD accounts to be one of the safest saving options. In fact, when we start earning money, we are also encouraged to open an FD account so that we do not end up spending all our money.  One can open an FD in a bank or post office. Let us today talk about FDs offered by the post offices in India.

The post offices in India are operated by the India Post. You can open an FD for a tenure period that ranges from 1 year to 5 years. The post office interest rate for FDs ranges from 5.50% to 6.70%. The post office FD interest rate for tax-saving FD for the general public is 6.70%. These kinds of FD schemes come with the highest form of capital protection as well as the certainty of income for the depositors since these are backed by the Union Ministry of Finance.

Post office fixed deposits are also called National Savings Time Deposits since these are operated by the National Savings Institute, which functions under the Department of Economic Affairs, Union Ministry of Finance.

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Features of Post Office Fixed Deposits

Tenure 1, 2, 3, and 5 years
Minimum Deposit Amount INR 1,000
Interest Payout Annual
Interest Calculation Compounded quarterly
Nomination Facility Available
Premature Withdrawal Allowed after 6 months
Interest Rates 5.50% p.a. for 1, 2 and 3 year-tenures; 6.70% p.a. for 5 year tenure

Post Office Fixed Deposit Interest Rates 

For Senior Citizens For Regular Citizens
Highest Slab Rate 6.70% p.a. (for 5 years) 6.70% p.a. (for 5 years)
For 1 year 5.50% p.a. 5.50% p.a.
For 2 years 5.50% p.a. 5.50% p.a.
For 3 years 5.50% p.a. 5.50% p.a.
For 5 years (including tax-saving FD) 6.70% p.a. 6.70% p.a.

As mentioned above, the interest rates offered by the Post Office to the customers are the same for all age groups. There are no special rates offered to senior citizens.

 Post Office Fixed Deposit Interest Rates Key Aspects

  • Interest amount can be received by the depositors directly in their bank accounts
  • Throughout the post office FD tenure, the rate of interest remains the same as the rate during the first deposit
  • Interest compounds quarterly and an annual payout is made
  • After maturity, no additional interest is earned unless tenure is extended
  • The interest is earned only on the deposit amount and not on the interest accumulated by the depositor, even in the event of the interest not being withdrawn
  • In case of extension of tenure, the maturity sum earns interest at the rate of the prevailing post office FD rates on the extension date.

Extension of Tenure for Post Office FD Account

  • Extensions are allowed for a few additional months once the FD has matured
  • The maturity amount has to be withdrawn by the depositor mandatorily unless an extension is applied for
  • Only two extensions  are allowed to the post office FD from the first deposit date
  • Duly filled Form -3 which is used for the extension of the account has to be submitted by the depositor
  • 1-year duration FD can be extended for 6 months, while FD with a duration of 2 years can be extended up to 12 months from the repayment date
  • 4-year and 5-year duration FDs can be extended up to 18 months from the repayment date.

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Post Office FD Account Benefits

Post Office FD, being backed up by the sovereign of India is an extremely secure and stable investment. Here are some prominent advantages of investing in the Post Office FD.

  • Post office FD can be opened online through net banking as well as offline
  • It is an extremely safe investment option as the guarantee for the safety of investments is borne by the Government of India
  • The primary focus of the FD is social welfare and not making a profit
  • The interest that is earned from the deposit is completely tax-free
  • The deposited can be made jointly by up to 3 members while individual deposits are also possible
  • A maximum tax deduction of 1,50,000 annually can be claimed by filing an Income Tax Return under the section 80C, available only on deposits made for 5 years
  • Transfer between post offices is allowed for the ease of the depositor
  • More than one FD can be opened at a given point of time at any post office of choice
  • The option to add a nominee to your FD account even after the account is already opened
  • FD can even be opened for minors under the guardianship of an adult
  • The post office FD interest rate 2022 is much higher than the one offered by most banks.

Post Office FD Account Eligibility Criteria

  • The account can be opened individually or jointly by any resident(s) of India
  • Under the guardianship of an adult, even minors can open a post office FD account
  • The post office FD account is not available for NRIs as well as institutions.

Also Read: 1 Crore Fixed Deposit (FD) Interest Per Month

The Process to Open a Post Office FD Account

Online Opening of Post Office FD Account

The account can be opened through the net banking facility. It is very easy to manage their account online and transfer funds as required. For this option, the depositor must have active savings account with the post office along with valid KYC documents, PAN card, updated email, and mobile number, and a Debit or ATM card issued from DOP. The following steps need to be followed:

  • Log in to the Post Office website with a registered email ID and password
  • Click on ‘General Services’ and then on ‘Service Request’
  • Add a new request under the heading ‘Time Deposit or Fixed Deposit opening request’
  • Follow the instructions on the scene to complete the process.

Offline Oening of Post Office FD Account

  • Visit the nearest Post Office branch with all required documents
  • Enquire about FD opening and confirm rates
  • Follow the instructions provided there and take a due receipt.

Post Office FD is a great saving option for those who wish to securely save some money for the future while also earning interest according to Fixed Deposit rates in a Post Office. Those who are looking for more benefits from their savings may also consider life insurance products that provide comparable returns along with the added benefit of life insurance.

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Jun 24, 2022
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