Post Office TD Calculator
Compute your Post Office Time Deposit maturity — pick a 1, 2, 3 or 5-year tenure and the official GoI rate applies automatically with quarterly compounding.
Year-wise growth
| Year | Deposited | Value at year end |
|---|---|---|
| 1 | ₹1,00,000 | ₹1,07,714 |
| 2 | ₹1,00,000 | ₹1,16,022 |
| 3 | ₹1,00,000 | ₹1,24,972 |
| 4 | ₹1,00,000 | ₹1,34,611 |
| 5 | ₹1,00,000 | ₹1,44,995 |
What is a Post Office Time Deposit (POTD)?
A Post Office Time Deposit (POTD) — commonly known as the National Savings Time Deposit Account — is the government-guaranteed equivalent of a bank fixed deposit, administered through India Post's network under the Government Savings Promotion Act. Savers deposit a lump sum for a fixed tenure, earning sovereign-guaranteed interest backed by the Central Government.
POTD accounts are available in four distinct statutory tenures: 1 Year (6.9%), 2 Years (7.0%), 3 Years (7.1%), and 5 Years (7.5%). Interest is calculated using quarterly compounding, but paid out annually. The 5-year Time Deposit qualifies for income tax deductions under Section 80C.
Interest Structure, Annual Payouts & Tenure Slabs
Key operational and structural features of Post Office Time Deposits:
- Quarterly Compounding with Annual Payout: Unlike bank cumulative FDs (where interest is reinvested until maturity), POTD calculates interest with quarterly compounding, but officially credits the annual interest payout directly into your Post Office Savings Account at the end of each financial year!
- Four Tenure Slabs:
- 1-Year TD: 6.9% per annum
- 2-Year TD: 7.0% per annum
- 3-Year TD: 7.1% per annum
- 5-Year TD: 7.5% per annum (eligible for Section 80C tax deduction)
- No Upper Ceiling: Minimum deposit is ₹1,000 (in multiples of ₹100), with no upper limit on the total amount you can invest.
The Post Office Time Deposit Compounding Formula
Annual Interest = P × [ (1 + r/4)⁴ − 1 ]
- Annual Interest: Rupee interest credited to your savings account at the end of each completed year.
- P — Principal amount deposited.
- r — Sovereign notified interest rate (e.g. 7.5% → 0.075 for 5-Year TD).
- Maturity Payout: At the end of the tenure, your original principal
Pis refunded in full.
A Worked Example: ₹5,00,000 Invested in a 5-Year POTD at 7.5% p.a.
Financial Breakdown for a ₹5 Lakh 5-Year Post Office Time Deposit:
- Principal Invested: ₹5,00,000
- Tenure: 5 Years
- Interest Rate: 7.50% per annum (compounded quarterly)
- Annual Interest Payout: ₹38,567.85 per year credited to your savings account
- Total Interest Earned (5 Years): ₹1,92,839.26 (~₹1.93 Lakh)
- Maturity Refund: ₹5,00,000 (Total Proceeds: ₹6,92,839)
Post Office Time Deposit Annual Income & Total Returns on ₹1,00,000 Deposit
| POTD Tenure Slab | Notified Rate | Annual Interest Payout | Total Interest Received | Maturity Refund |
|---|---|---|---|---|
| 1-Year TD | 6.90% p.a. | ₹7,081/yr | ₹7,081 | ₹1,00,000 |
| 2-Year TD | 7.00% p.a. | ₹7,186/yr | ₹14,372 | ₹1,00,000 |
| 3-Year TD | 7.10% p.a. | ₹7,291/yr | ₹21,873 | ₹1,00,000 |
| 5-Year TD (80C Tax-Saver) | 7.50% p.a. | ₹7,714/yr | ₹38,568 | ₹1,00,000 |
Values calculated using quarterly compounding with annual interest payout. The 5-year TD qualifies for Section 80C deductions.
Tax Deductions on 5-Year POTD & Zero TDS Rules
Tax implications governing Post Office Time Deposits:
- Section 80C Deduction: Investments in the 5-Year Time Deposit qualify for income tax deduction up to ₹1,50,000 under Section 80C (Old Tax Regime). Tenures of 1, 2, and 3 years do not qualify for 80C.
- Zero TDS: India Post does NOT deduct any TDS (Tax Deducted at Source) on annual interest payouts or principal maturity! You must declare the annual interest in your ITR under "Income from Other Sources".
- Premature Closure: No deposit can be withdrawn before 6 months. If closed between 6 and 12 months, only Post Office Savings Account interest (4.0% p.a.) is paid. If closed after 1 year, interest is calculated at 2% below the applicable TD rate.
Post office TD questions, answered
Crucial answers on tenure slabs, Section 80C tax deduction, annual payout structure, zero TDS, and premature exit rules.
Current notified rates: 1-Year TD: 6.9%; 2-Year TD: 7.0%; 3-Year TD: 7.1%; and 5-Year TD: 7.5% per annum. All rates are compounded quarterly and reviewed every quarter by the Ministry of Finance.
Only the 5-Year Post Office Time Deposit qualifies for income tax deductions up to ₹1,50,000 under Section 80C of the Income Tax Act (Old Tax Regime). Deposits for 1, 2, or 3 years do not qualify for tax deductions.
Interest is calculated on a quarterly compounding basis, but is paid out annually directly into your linked Post Office Savings Account at the end of each financial year. It cannot be accumulated into principal.
No. India Post does not deduct any TDS on annual interest payouts. However, the interest received is fully taxable at your applicable income tax slab rate under "Income from Other Sources".
The minimum deposit is ₹1,000 (in multiples of ₹100). There is no upper limit on the amount you can deposit in Post Office Time Deposits.
Premature closure is not allowed before 6 months. If closed between 6 months and 12 months, only savings bank interest (4.0% p.a.) is paid. If a 2, 3, or 5-year account is closed after 1 year, interest is paid at 2% below the specified TD rate for completed years.
Yes. Upon maturity, you can extend your account within specified windows (within 6 months for 1-year TD; 12 months for 2-year TD; 18 months for 3/5-year TD) at the interest rate prevailing on the date of maturity.
Yes. A POTD account can be opened jointly by up to three adults (Joint A or Joint B), or by a parent/guardian on behalf of a minor child.
Yes. POTD accounts can be pledged to the President of India, state governors, commercial banks, cooperative banks, or housing finance institutions as security for loans by submitting a pledge application at the issuing post office.
5-Year POTD currently pays 7.5% p.a., which is higher than most large public and private sector bank FDs (6.5%–7.0%), offers 100% sovereign government safety, features zero TDS, and can be pledged for loans. Bank tax-saving FDs cannot be pledged and deduct 10% TDS.