On December 12, 2019, the Government of India announced the National Savings Time Deposit Scheme which is also known as Post Office Time Deposit Scheme through No. GSR 922 (E). The account holders under this scheme go through four maturities. The main catch of this scheme is that the interest rate that this TD Account offers is much higher than many other regular savings bank accounts. The interest rate depends on different maturities and it also increases with time depending on various factors. The minimum amount of this scheme is Rs. 1000. This scheme is for everyone as one has to invest only Rs. 100 to maintain this scheme. If someone is up for investing a small amount and building a corpus then this Post Office Time Deposit Account is the ideal one for him/her.
Features and Benefits of Post Office Time Deposit Account
Here are some important features of this scheme.
- One can open multiple accounts under this scheme.
- There can be 4 types of accounts that can be opened under this scheme – Accounts for 1 year, 2 years, 3 years, and 5 years.
- The interest amount that has been accumulated will be paid annually. If the policyholder wants the amount to be paid to his/her bank account, that is also possible. For that, he/she has to apply.
- There would be no additional amount of interest that has become due for payment, and the account holder has not withdrawn.
- If anyone invests in the 5-years account then he/she is eligible to avail of tax benefits under Section 80C of the Income Tax Act.
- Maturity benefit is available and that is payable after 1 year, 2 years, 3 years, and 5 years from the day of opening as per the policy chosen.
- One has the opportunity to extend the account once it matures for another year for which the account was initially opened. The interest rate is applicable for the extended period as well.
- If you want to extend your account, you can apply for the same when you are opening the account initially. For this, you have to apply to the concerned post office along with the passbook and other necessary documents.
Eligibility Criteria
If you are an Indian citizen then you can open this account. However, there are a few more clauses. Here are the mentions.
- Any single adult whose age is a minimum of 18 years can open this account.
- One can open a joint account. The maximum member limit is 3.
- If you want to open an account for a minor, then the account can be opened by an adult on behalf of the minor.
- If anyone is mentally disabled then a guardian on behalf of that person can open this account.
- A minor who is 10 years old or above can open this account in his/her name.
Interest rate for National Savings Time Deposit Account
Interest rates from 01.10.2023 to 31.12.2023
| Period | Rate |
| 1 year account | 6.9% |
| 2 years account | 7.0% |
| 3 years account | 7.0% |
| 5 years account | 7.5% |
Required Documents For Opening a Post Office Time Deposit Account
The following are the required documents if you wish to open this account.
- A form for opening the account
- KYC form
- PAN card
- Aadhar Card. If an Aadhar card is not available then any of the following documents can be submitted – passport, driving licence, voter ID, job card issued by MNREGA signed by the State Government Officer, or letter insured by the National Population Register.
- Birth certificate for the minor account
- For joint accounts, KYC details of all the account holders
- For minor accounts, KYC details of the guardian
- Once the minor reaches the age of 18 years, a new account has to be opened under his/her name along with KYC details.
- For an investment above Rs. 10 lakhs, the source of funds has to be submitted.
- For senior citizens, the receipt of pension benefits has to be submitted.
What is Premature Closure for a National Savings TD Account?
If you want to close the TD account before its maturity, then you have to keep in mind the following points.
- One cannot withdraw any deposited amount before the expiry of 6 months from the date of deposit.
- If you wish to close the Time Deposit account after six months, but before 1 year, then the interest rate will be equal to the Post Office Savings Account’s interest rate.
- If your TD account is for 2/3/5 years, but if you wish to close it after 1 year only, then the interest rate will be 2% less than the actual interest rate of your TD account.
- One can close the TD account prematurely by submitting the application form, and passbook along with necessary documents to the concerned post office.
How can you transfer a Time Deposit Account?
One can transfer the Time Deposit account as security by submitting the necessary application form to the concerned post office. The acceptance letter from the pledgee has to be submitted too. The following authorities are responsible for looking after the transfer.
- The President of India/The Governor of the State
- RBI/Scheduled Bank/Co-operative society/Co-operative bank
- Corporation (public/private)/Govt. Company/Local Authority.
- Housing finance company
How To Open an e-banking Facility for a TD Account at the Post Office?
One can avail of the e-banking or mobile banking facility for this account. For this one has to submit the required form duly signed by the concerned post office. Once this facility is enabled, the account holder will receive an activation code within 48 hours of opening the account. Then he/she has to go to the New User Activation option of the portal to activate the service. The following services are available in the e-banking facility.
- Opening of TD account
- Taking RD loan/PPF withdrawal
- Stop cheque request
- Deposit in RD/PPF/SSA/SB Accounts standing in CBS post offices
- Mini statement
- Repayment of RD loan/PPF loan
- View/print transaction details of all Small Savings Schemes that are linked to the account of the account holder.
Frequently Asked Questions
Conversion of a joint account to a single account or vice-versa is not allowed under a TD scheme.
NRIs are not eligible to open a Post Office Time Deposit Account.
Presently, this account can be opened in PPF/SCSS/MIS/KVP/NSC in the different branches of the Post Office through cheque only.
The interest is payable annually but calculated quarterly.
The Minimum amount is as low as Rs. 1000. There is no upper limit for the maximum amount.
