post office time / FIxed deposit VS Bank FD Tax benefits, Interest rate calculation

post office time deposit / Fixed Deposit (POTD/POFD)
Eligibility	18+ years  single, joint, minor
Interest rate	7 to 7.8%
How to pen	any post office
Investment Limit Per Year	200 to no maximum limit
Partial withdrawal	not allowed
Premature closing	After 6 months with saving bank interest rate, after 1 year with 1% penalty on interest
Maturity / Lock-in Period	1-5 years
Extension	automatic renewal
Tax Benefits	Deposited amount 1.5 lakh /year

 

Main Features:

• Low Lock-in Period 1 /2 /3/4 /5 year. However section 80c Applicable only for 5 years investment.

post office fixed deposit double

It simple to know the appreciation of your money with this single formula.

divide interest rate with 72. you will get

ex: 8% interest rate

72/8=9 years your money will be double with POSt Office FD when compared to regular bank fixed deposits hear you earn better interest.

 

post office fixed deposit interest rates 2019

Note: Interest rates reviewed every quarter by Ministry of finance

Fixed Deposit scheme	Interest rate	Year
Post Office Time Deposit (1 year)	7.0	From 01.01.2019
Post Office Time Deposit (2 years)	7.0
Post Office Time Deposit (3 years)	7.0
Post Office Time Deposit (5 years)	7.8

Interest calculated quarterly but credits yearly.

If TD account matures it automatically renewals if do not withdraw your money at maturity.

post office time deposit calculation 2019

 

Fixed Deposit scheme	Deposit amount	Interest rate	Effective annual rate	Interest earned	Maturity
Post Office Time Deposit (1 year)	2 Lakhs	7.0	7.19%	14,371.81	214,371.81
Post Office Time Deposit (2 years)	2 Lakhs	7.0	7.19%	29,776.36	2,29,776.36
Post Office Time Deposit (3 years)	2 Lakhs	7.0	7.19%	46,287.86	246,287.86
Post Office Time Deposit (5 years)	2 Lakhs	7.8	8.03%	94,289.39	2,94,289.39

FDs compounded /calculated quarterly by default.

NOte: Post may Include effective annual Intrest rate as Annual Interest rate.

post office time deposit tax benefit

1. Income Tax Act India, 1961, the rule allows 1.5 lakh rebate under Section 80C.
2. post office time deposit rules 1981  called as Post Office Time Deposit (Amendment) Rules, 2016.
3. NO TDS at source

withdrawal benefits

1. 50,000 Benefit for senior citizens under section 80TTB
2. 10,000 for individuals below 60 under 80 TTA

also, check the Post office Monthly Income Scheme & Senior Citizen Saving scheme

 

Bank FD Vs Post OfFice TD

1. Post Office Intrest rates are slightly higher than Bank FD.
2. NO TDS Deducted by Post office but banks do.