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Post Office FD - Scheme, Eligibility, Documents

India Post Office Fixed Deposit Highlights

Last Updated 25th Nov 2020

India Post Office fixed deposit is a reliable, secure and beneficial investment option that offers various benefits such as guaranteed returns, Government insurance, loan borrowing facility and flexible fixed deposit tenure.

Interest Rate 5.50% to 6.70%
Minimum Tenure 7 days
Maximum Tenure 5 Years
Deposit Amount Rs. 1000
Maximum Deposit No Limit
    Earn upto 6.95% on FD APPLY NOW

    India Post Office FD

    India Post Office is one of the leading fixed deposit providers in the country. The Post Office offers FD with flexible tenures ranging between 7 days to 5 Years. Apart from that, India Post Office FD offers regular returns on fixed deposits ranging between 5.50% to 6.70%. For senior citizens, the interest rates on fixed deposits range between 5.50% to 6.70%. In addition to that, India Post Office fixed deposit plans offer tailor-made fixed deposit products for different kinds of fixed deposit investors.

    Types of India Post Office Fixed Deposit Schemes

    Different type of India Post Office term deposit products offered to the investors are listed as follows:

    National Savings Time Deposit Account

    Description:

    • The Department of Post Ministry of Communication Government offers the Post Office Time Deposit Account (TD). It is an investment in which a lump-sum sum amount is deposited at an agreed rate of interest for a fixed period, ranging from 1 month to 5 years. Post Office Time Deposit Account (TD) can be availed at post offices. It helps in generating wealth and saving taxes. Below mentioned are the features of National Savings Time Deposit Account:
    • Account can be opened by cash or cheque
    • Nomination facility is available
    • Account can be transferred from one post office to another
    • Minor after attaining the age of 18 years has to apply for conversion of the account in his name.
    • Interest is paid annually
    • Premature withdrawal not allowed before the expiry of 6 month, If closed between 6 month to 12 month from date of Opening, Post Office Saving Accounts interest rate will be payable
    • Online Account Opening facility is available
    • The corpus under 5 Years Time Deposits qualifies for the benefit of Section 80C
    • Minimum deposit of Rs. 1000 and in multiple of Rs. 100
    • No maximum limit.

    Eligibility:

    • (i) A single adult (ii) Joint Account (Maximum 3 adults) (iii) Minor above 10 years of age (iv) A guardian on behalf of a minor or Person of unsound mind

    Benefits of India Post Office FD

    India Post Office fixed deposit is a popular investment option due to a number of benefits it provides to the FD investors. Some of these are mentioned below:

    • Guaranteed returns: The best thing about India Post Office FD is that it offers guaranteed and assured returns to the investors. The return offered on a fixed deposits is regulated by the Bank on a monthly, or quarterly basis, as per the Bank’s choice. Currently, India Post Office offers FD rates up to 6.70%. The interest rates offered on India Post Office FD is not only assured but also way higher than a savings account.
    • Insured by the Government: The Deposit Insurance and Credit Guarantee Corporation offers deposit insurance of ₹ 5 Lakh to fixed deposits across all banks. Investing in a fixed deposits with the highest rating of AAA, rated by ICRA and CRISIL, is a reliable investment option.Thus, India Post Office term deposit is safe and secure, as the funds are backed by the government no matter what the current situation of the Bank is.
    • Loan against FD: The investment made in an FD scheme is not only a reliable investment option but can also act as an asset. This is because India Post Office fixed deposit allows one to borrow a secured loan against India Post Office FD. Benefits of Loan Against FD of India Post Office are as follow:
      • Loan against FD of India Post Office offers the loan amount upto 90%-95% of the FD amount.
      • The interest charged on the loan against FDs are generally low and are 2% to 3% higher than the FD interest rate.
      • Loan against FD of the India Post Offices flexible repayment options.
      • The processing fee of Loan Against FD in the India Post Office is nil.
      • It is a hassle-free loan and does not require the depositor to break the FD.
    • Flexible tenures: India Post Office FD offers the investors the flexibility to choose the investment tenure as per their convenience. India Post Office offers fixed deposit for a minimum tenure of 7 days up to a maximum tenure of 5 Years. India Post Office offers different interest rates across FD tenures.
    • Flexible investment: Apart from the flexibility of tenure, India Post Office fixed deposit offers the flexibility of funds to FD investors as funds can be invested with a minimum amount of Rs. 1000. Apart from that, one can invest in the India Post Office FD up to a maximum of No Limit.

    Premature Withdrawal Terms and Conditions

    Though a fixed deposit with India Post Office means depositing funds for a fixed period of time in expectation of a regular return. However, keeping in view the instability in the markets, the Bank allows premature withdrawals of funds from a fixed deposit. This means that investors can withdraw their funds before the date of maturity to fulfil their urgent financial conditions.

    Withdrawing funds prematurely from India Post Office will attract an interest rate lowered by Allowed below the effective rate on the date of booking the FD. The penalty charged on fixed deposits is valid only on fixed deposits with a tenure greater than seven days. In case of premature withdrawal of India Post Office fixed deposits with tenure less than seven days, the bank does not pay any interest.

    Eligibility Criteria for India Post Office FD

    India Post Office FD facility can be availed by the following type of investors:

    • Indian Citizens
    • Members of HUFs or the Hindu Undivided Family
    • Business firms
    • Local governing bodies
    • Government departments
    • Employees of private limited companies
    • Trust accounts

    Documents for India Post Office FD

    India Post Office fixed deposit requires one to submit the following documents:

    • Passport size photographs
    • Identity proofs such as Aadhar card, passport, PAN card, and driving license.
    • Address proofs such as passport, ration card, utility bills such as water, gas or electricity bill.
    • Age proof such as birth certificate, matriculation passing certificate, and Voter ID card.
    • Bank account details such as passbook and account number.

    Credit Card Against India Post Office FD

    Credit Cards againstIndia Post Office FD are secured credit cards. They are availed against the amount deposited in the term deposits. They are an ideal option for individuals with low CIBIL score and salary. Below mentioned are the important features of Credit Cards against India Post Office FD:

    • The limit offered on the credit card depends upon the amount deposited in the fixed deposits. Generally, banks offer around 80% of the deposit amount as the total credit limit on the card.
    • Credit Cards against the fixed deposits require minimum documentation.
    • The minimum tenure of the term deposits should be 6 months to avail credit card against it.
    • Secured Credit cards also offer discounts, cashback and rewards.
    • The cardholder continues to earn the same applicable interest rate on FD.

    FAQs

    What is the loan against FD repayment tenure in India Post Office?

    Loan against FD is the  facility which allows the investor to avail the loan against the amount deposited in the term deposit. India Post Office offers the loan against FD facility to the FD investors with a repayment tenure of up to 5 Years.

    What is the minimum investment for FDs under India Post Office?

    India Post Office Fixed Deposit is one of the safest investment avenues and it can be availed with a minimum deposit of Rs. 1000.

    What is the minimum amount for a fixed deposit in India Post Office?

    The minimum amount required for a fixed deposit investment in India Post Office fixed deposit is Rs. 1000.

    What is the current interest rate on FD in India Post Office?

    Currently, India Post Office offers an interest rate ranging between 5.50% to 6.70% on its fixed deposits.

    What is the penalty for early withdrawal in India Post Office?

    Bank charges penalty on premature withdrawal of fixed deposits. The penalty for early withdrawal ranges between 0.5% to 1% in most cases, based on the loan amount and tenure.

    What is the minimum FD tenure for which a fixed Deposit account can be opened in India Post Office?

    India Post Office fixed deposit can be opened with a minimum tenure of 7 days. The tenure of the India Post Office fixed deposits ranges from 7 days to 5 Years.

    Can I deposit additional amount in my India Post Office FD account?

    No, you cannot deposit any additional amount in your existing FD account as you are allowed to deposit only once at the time of opening the account. If you want to invest any additional amount in FD, you are required to open a new FD account.

    Who is eligible for opening an FD account in India Post Office?

    All resident individuals, HUFs, NRIs, Firms including minors are eligible to open a fixed deposit account.

    What documents are required to open an FD account in India Post Office?

    The documents required to open an FD account in India Post Office includes KYC documents and Passport size photos.

    In how many years FD doubled in the India Post Office?

    The time India Post Office fixed deposits will take to double the initial amount will depend upon the rate of interest offered on the FD. You can calculate the maturity amount of the India Post Office FD at MyLoanCare by entering the amount you want to deposit and the interest offered on FD.

    Can an NRI open a India Post Office fixed deposit account?

    No, Non-Resident Individuals are not allowed to invest in India Post Office schemes. It means that they are not eligible to invest in fixed deposits.

    Is the India Post Office safe for FD?

    Yes, the India Post Office is one of the safest avenues for any investments. India Post Office is backed by the Government of India and the returns on any investment including fixed deposits are guaranteed.

    Is it wise to take a loan against FD from the India Post Office?

    Yes, opting for a Loan Against FD is an excellent decision. The reasons to take loan from India Post Office are:

    • It offers the loan upto 90%-95% of the FD amount.
    • The interest levied on the loan against FDs are generally low and are 2% to 3% higher than the FD interest rate.
    • Loan against FD offers flexible repayment options.
    • The processing fee of Loan Against FD is Nil.
    • It is a hassle-free loan and requires minimum documentation.
    • Loan against FD helps the depositors to avoid the option of premature withdrawal.

    However, there might be a chance that the alternative credit option is offering lower rates with better facilities. In that case, individuals must compare and decide on the credit option.


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