Just like a fixed deposit, a post office time deposit scheme is a term deposit made for a specific amount for a certain duration of time. Post office in India offers a time deposit for 1, 2, 3 and 5 years. The investor can open a time deposit account in the post office by submitting the following documents:
- Time Deposit Account Opening Form
- Self-attested photo identification proof such as PAN card, Driving License, Passport, an Election ID card with photo, photo identity card with the recognized university, identity card issued by central or state government, photo identity card of recognized university/college/school, a letter issued by UDAI containing Name, address, and Aadhar number. In case the applicant is illiterate, the document needs to be attested by Gazetted Officer, Chief / Branch / Head / Sub Postmaster or postman or gram dak sewak delivery agent, Sarpanch.
- Address proof such as Passport with current address, electricity, water or telephone bill of not more than 3 months, ration card with current address, salary slip mentioning the current address of not more than 3 months old issued by a reputed employer, the letter issued by UDAI containing Name, address, and Aadhar number, any certificate issued by public authority/branch postmaster, gram dak sewak delivery agent or postman. In case the applicant is illiterate, the document needs to be attested by Gazetted Officer, Chief / Branch / Head / Sub Postmaster or postman or gram dak sewak delivery agent or Sarpanch.
- Passport size photograph.
- In case the time deposit account is opened through an agent, all documents need to be attested by the agent as well.
- Cash or cheque deposit of a minimum amount of Rs. 1000/-.
Who can open an Account?
- A single adult
- Joint account can be opened by a maximum of 3 adults
- A Minor above the age of 10 can also open an account.
- A guardian or parent on behalf of a minor or a person with unsound mind.
Features of Post Office Time Deposit Scheme
- Post office Time deposit can be opened for a period of 1, 2, 3 and 5 years. However, an applicant can extend the period of post office Time deposit by giving an application at the time of maturity.
- The minimum amount required to be deposited in the post office time deposit account is Rs. 1000/- and the deposit made should be multiple of Rs. 100/-. There is no maximum limit.
- An account can be opened by payment of cash or a cheque of a minimum amount of Rs. 1000/-. The date of opening of the account shall be the date of realization of the cheque.
- Interest is calculated quarterly.
- It is a one-time investment and interest is payable annually.
- If the interest is due and the account holder has not withdrawn the interest, no further interest on such amount is payable.
- The account holder can opt to take credit of interest in his or her post office saving account annually.
- There is a locking period of 6 months and the TD holder cannot withdraw money whether partially or fully before the completion of 6 months. The interest rate payable shall be equivalent to saving account in case the post office time Deposit account is closed pre-maturely within 6 to 12 months.
- The account holder gets tax benefits under section 80C for time Deposit made for 5 years. Such a time deposit has a locking period of 5 years and cannot be opened prematurely.
Few points to note:
- There is no limitation to the number of time deposit an individual can open. Therefore, any individual can open any number of time Deposits in any post office.
- The depositor can nominate any of his or her family members or legal hire at the time of opening the post office time deposit account or at any time before maturity.
- An account holder/holder can add or delete a name from the account.
- The post office time deposit account can be transferred to any other post office branch.
- After attaining maturity, a minor needs to change the account title in his name.
- The account holder can be open time deposit account online through net banking or mobile banking facility.
- The time deposit is non-transferable to any third party.
Closure of Account
- The account can be closed prematurely only upon completion of 6 months.
- In case of the death of the single account holder, his legal heir or nominee can close the account after submission of the required documents.
- In case of the death of a joint account holder, the remaining account holder can continue with the account after submitting the documents related to the death of the joint account holder.