Post Office Fixed Deposit and Post Office Time Deposit are both terms for the same thing (POFD). It is comparable to banks’ fixed deposit (FD) programme. The India Post provides this programme. The programme offers a guaranteed return to the depositor who places money into it for a set amount of time. Although the programme is accessible to everyone, it is especially well-liked in rural and isolated parts of the nation where there are few banks and few investment options.
Post-Office Term Deposit Scheme Features
The primary characteristics of the Term Deposit Account offered by India Post are stated below.
- In addition to checks, cash can be used to start a term deposit account. When a check is used, the date the money was deposited counts as the day the check was presented.
- The account must mature after five years, although this term may be extended on an annual basis for additional years.
- Returns on investment and tax benefits are other features of this five-year Post Office Term Deposit Scheme.
- The minor who started the account must apply for the account to be changed to his name once he reaches the age of majority.
- A single account can become a joint account, and vice versa.
- The account holder can designate someone during account opening or even after the time deposit account has been opened with simplicity.
- Under section 80C, the depositor is eligible to get a tax break on investments made for a 5-year plan.
- After the fixed deposit account reaches its maturity period, it will automatically renew.
- Under the post office time the Indian Government backs deposit system, one can obtain capital protection.
- It provides a guaranteed return charged upon account opening.
- Since the money may be taken out at any time, it provides liquidity. This time deposit can also be used as collateral for a loan.
- Any citizen of India can open a single account.
- The individual can open a joint account with up to three adults.
- A minor who is 10 years of age and more can not only open but also operate the account.
- On behalf of the minor, a parent or guardian can also open the account.
- On behalf of the person of an unsound mind, the guardian can open the account.
The NRIs are not permitted to open the post office time deposit account. Besides groups or funds, such as welfare funds, trust funds, regimental funds and institutional account holders as well cannot access the post office time deposit scheme.
The following groups/funds are not allowed to avail the Post Office Time Deposit Scheme
- Institutional account holders
- Trust funds
- Regimental funds
- Welfare funds
The following are the important documents that need to be submitted to open the account:
- Filled application form of Post Office Time Deposit Scheme Passport size photographs
- Identity Proof: PAN card, Aadhar card or Voter ID
- Address Proof: PAN card, Ration card, Aadhar card, Voter ID or Driving license
- Income Proof: Salary slips of the last three months or statement of the bank account of the recent six months
Procedure to open Post Office Time Deposit
To open a Post Office Time Deposit Account, the depositor has to follow the below procedures.
Approach a Post Office
Step 1: First the applicant must decide the Post Office where they want to open the account.
Get Application Form
Step 2: Then get the required application form from the relevant post office that has chosen and have to fill out the post office time deposit application form in a prescribed format.
Note: The user may also download the Post Office Time Deposit Account Opening Form online.
Fill in the Right Credentials
Step 3: Fill the Post Office Time Deposit Account Opening application form with appropriate details without making any mistakes. Then provide the given following details in the application form.
- Applicant’s Name
- Residential Address
- Applicant’s Date of Birth
- Detail of Know Your Customer (KYC)
- Nomination Details
- Details of First deposit
- Aadhaar card number
Step 4: Submit the time deposit account application form application form in the prescribed format to the relevant official along with all the supporting documents/ certificates.
Attach Required Documents
Step 5: After completing, attach the PAN Card, Address Proof, and all the ID proof records along with the application form. And carry the originals documents for the in-person KYC verification purpose.
Submit the Application
Step 6: After completing the application form, submit the same and start operating the account.
Premature Withdrawal of POTD Funds
A post office time deposit account allows its owners to withdraw money even before the account matures. The sole requirement that must be met in order to qualify for a premature withdrawal is that at least 6 months have passed from the date of the first deposit. The following are the most important terms and conditions in the event of an early withdrawal from a time deposit:
Simple interest is paid in accordance with the Post Office Savings Account interest rate if a premature withdrawal of 1/2/3 or 5 year POTD is made after 6 months but before 1 year from the date the time deposit account was opened.
The appropriate interest rate is 1% less than the interest rate corresponding to the term the account was initially booked for if a premature withdrawal of a 1/2/3 or 5 year TD account is made after 1 year from the date of account establishment.