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What Is A Post Office FD? What Are Its Interest Rates?

Published On Dec 24, 2021

The oldest and largest banking institution in the country is the Post Office Savings Bank (POSB). Over 238 million savings accounts are managed by the company. The Department of Posts, on behalf of the Ministry of Finance, administers the Post Office Savings Bank programmes.

Senior persons do not receive any additional interest rates under Post Office programmes. In this approach, regardless of whether the investor is more than or less than 60 years old, the earnings on a given sum are the same.

The post office fixed deposit (POFD), also called a "post office time deposit," is a handy alternative to bank-provided fixed deposits. An individual can earn a guaranteed return on money placed for a specific length of time under the Indian Postal Services' fixed deposit scheme.

Post Office FD's Benefits

Many people prefer to invest in the Post Office Fixed Deposit Scheme. The advantages that it provides are the reason for this. Apart from the higher interest rates on post office FDs, the following are some of the most notable advantages of having one:

  • This is a government-sponsored initiative, the Indian government provides a guarantee, giving investors complete peace of mind.
  • An account can be opened in person or online using net banking.
  • Because it is a non-profit organisation, it focuses primarily on social welfare, which is the scheme's key selling point.
  • On earned post office interest rates, there is no tax (TDS).
  • Deposits can be made singly or collectively for up to three people.
  • When the ITR is filed, five-year deposits are eligible for tax deductions through gross salary (under section 80C for up to Rupees). One lakh and fifty thousand dollars every fiscal year).
  • A person's FD account can be readily transferred from one Post Office to another.
  • In any of the Post Offices, one can open multiple FD accounts.
  • Under the supervision of a guardian, a juvenile can also open an FD account.
  • Nominees can be added to an account even after it has been opened.

Documents Required

The following documentation must be supplied to open a fixed deposit account at a post office:

  • PAN Card (Personal Identification Number)
  • Photographs in passport size (2 or more)
  • Identification with a photograph (e.g. Aadhaar Card, Voter ID Card, etc.)
  • Proof of Address (e.g.Utility bills, water bills, ration cards, Aadhar cards, and so forth.)


A person must be one of the following in order to open a time deposit or fixed deposit account with any Indian post office:

  • Adult who is single.
  • In the case of a minor or a mentally ill person, a legal guardian is appointed.
  • Over ten-year-old minor.


A post office fixed deposit plan is ideal for conservative investors such as retirees or those who are about to retire. It's an excellent investment for people seeking a low-risk investment with a consistent income and capital protection.

To open a post office fixed deposit scheme, you can make cash or check payments. If payment is made by check, the day the check is realised is the date the account is opened. NRIs, on the other hand, are unable to open a fixed deposit account at a post office.

Also read: Which One To Choose? FD Or PPF?

How Will Investing In PPF Benefit Me?

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.

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