Giving relief to crores of people investing in small savings schemes, the government has not made any change in the interest rates of Post Office Time Deposit (TD) for the April-June 2026 quarter. The Finance Ministry clarified in the notification issued on March 30, 2026 that the interest rates of all small savings schemes will remain the same. Under this, investors will continue to get 7.5 percent annual interest on post office time deposits of 5 years.
The decision to keep interest rates stable has been taken at a time when people looking for safe investment options are turning to schemes giving better returns.
The plan is available for four different periods
Post Office Time Deposit Scheme is available for tenures of 1 year, 2 years, 3 years and 5 years. At present the interest rates available on these are as follows.
- 1 year TD: 6.9%
- 2 year TD: 7.0%
- 3 year TD: 7.1%
- 5 year TD: 7.5%
Interest on the amount deposited in the post office is calculated on quarterly basis and is deposited in the account every year.
Banks are getting more interest than FD
If Post Office Time Deposit is compared with Fixed Deposit (FD) of big banks of the country, then Post Office is giving higher returns to the investors. For example, Post Office is offering 7.5 percent interest on 5-year deposits, while State Bank of India (SBI) is offering 6.05 percent, HDFC Bank 6.15 percent and ICICI Bank 6.50 percent.
Similarly, even in the period of 1 year, 2 years and 3 years, the interest rates of post office are better than the FD rates of these banks. This is the reason why post office schemes remain popular among risk-averse investors.
Who can open an account?
Any adult person can open a post office time deposit account. Apart from this, a joint account of up to three people, an account by a guardian in the name of a minor and a minor above 10 years of age can also open an account in his own name. The minimum investment amount in this scheme is Rs 1,000, while no limit on maximum investment has been set.
Benefit of tax exemption also
Tax saving is also a big advantage of the 5 year time deposit scheme of the post office. The investment made in this is eligible for tax deduction under Section 80C of the Income Tax Act. However, this benefit will be available only to the taxpayers choosing the old tax regime.
Experts believe that due to better interest rates, government guarantee and tax benefits, Post Office Time Deposit remains an attractive option for people who like safe investment.
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