Post Office Time Deposit (TD) 2026
The post-office fixed deposit with tenures of 1 to 5 years.
Rates for July–September 2026 (Q2 FY 2026-27) · Updated 27 September 2026What is Post Office Time Deposit (TD)?
The National Savings Time Deposit is the post office’s FD. You choose 1, 2, 3 or 5 years; interest is compounded quarterly and paid annually. The 5-year TD qualifies for the tax deduction under Section 80C / 123.
PO TD at a glance
| Particular | Details |
|---|---|
| 1-year TD | 6.9% |
| 2-year TD | 7.0% |
| 3-year TD | 7.1% |
| 5-year TD | 7.5% |
| Min deposit | ₹1,000 (multiples of ₹100) |
| Premature | After 6 months |
Tenure-wise interest rates
| Tenure | Rate (p.a.) | Annual interest on ₹1 lakh |
|---|---|---|
| 1 year | 6.9% | ₹7,081 |
| 2 years | 7.0% | ₹7,186 |
| 3 years | 7.1% | ₹7,291 |
| 5 years | 7.5% | ₹7,714 |
Government-notified terms for July–September 2026 (Q2 FY 2026-27). Verify the latest notification before investing.
Features & benefits of PO TD
1/2/3/5 years.
Interest paid annually; can auto-credit to RD.
5-year TD eligible for the ₹1.5 lakh deduction.
Eligibility — who can invest?
- Resident adults (single/joint up to 3)
- Minors through guardian; minor above 10 in own name
How does PO TD work?
- Deposit lump sum.
- Interest compounds quarterly, credited annually.
- Extension on maturity allowed.
Tax benefits of PO TD
| Stage | Tax treatment |
|---|---|
| 5-year TD | Deduction up to ₹1.5 lakh (old regime) |
| Interest | Taxable; TDS may apply |
Section 80C of the Income-tax Act, 1961 is Section 123 of the Income-tax Act, 2025 from tax year 2026-27. Deductions apply only in the old tax regime.
Withdrawal, premature closure & maturity rules
| Situation | Rule |
|---|---|
| Before 6 months | Not allowed |
| 6–12 months | POSA rate |
| After 1 year | 2% less than TD rate for completed years |
At maturity
| Option | What happens |
|---|---|
| Extension | Extend for the same tenure at prevailing rate |
PO TD returns — worked examples
| Tenure | Rate | Annual interest on ₹1 lakh | Total interest |
|---|---|---|---|
| 1 year | 6.9% | ₹7,081 | ₹7,081 |
| 2 years | 7.0% | ₹7,186 | ₹14,372 |
| 3 years | 7.1% | ₹7,291 | ₹21,874 |
| 5 years | 7.5% | ₹7,714 | ₹38,568 |
Quarterly compounding, paid annually, before tax.
PO TD calculator
How to open / invest in PO TD
- Post office or online (IPPB/India Post net banking).
- Choose tenure.
- Deposit.
Documents required
- Aadhaar
- PAN
- Photographs
Important forms
| Form | Purpose |
|---|---|
| Account opening | Open TD |
| Closure | Premature / maturity |
Advantages & limitations
- Sovereign safety
- Flexible tenures
- 5-year tax saving
- Interest taxable
- Premature penalty
Mistakes to avoid
- Choosing 5-year for tax when liquidity is needed
PO TD vs other saving schemes
| Scheme | Rate | Tenure | Minimum | Tax |
|---|---|---|---|---|
| PO TD | 6.9% – 7.5% p.a. | 1, 2, 3 or 5 years | ₹1,000 | 5-year TD qualifies for deduction; interest taxable |
| Tax Saver FD | ≈5.5% – 7.75% p.a. (bank-wise) | 5 years (lock-in) | ₹100 – ₹1,000 (bank-wise) | Deduction on deposit; interest taxable |
| NSC | 7.7% p.a. | 5 years | ₹1,000 | EET (reinvested interest deductible) |
| PO RD | 6.7% p.a. | 5 years (extendable by 5 years) | ₹100 per month | Interest taxable |
| POMIS | 7.4% p.a. | 5 years | ₹1,000 | Taxable — no deduction |
Frequently asked questions
Is PO TD safer than bank FD?
PO TD is sovereign-backed; bank FDs are insured by DICGC up to ₹5 lakh.
Which TD saves tax?
Only the 5-year TD.
Information is for education and comparison. Interest rates are notified by the Government every quarter and scheme rules can change — confirm with India Post, your bank, EPFO or PFRDA before investing. FinancePortal is not a financial or tax adviser.