Let us see about Time Deposit Investment Scheme in India in India below in detailed.
The Time Deposit (TD) investment scheme in India is a government-backed fixed deposit offered through India Post, launched under the National Savings schemes, providing secure short- to medium-term investment with 1-5 year tenures, interest rates up to 7.5% p.a. for FY 2025-26 (compounded quarterly), and partial tax benefits—only 5-year TD qualifies for deductions up to ₹1.5 lakh under Section 80C. Designed for conservative investors seeking capital protection and predictable returns, it offers sovereign guarantee, easy access via post offices, and suitability for emergency funds or goal-based savings without market risks.
Where Should I Apply for a TD Account?
Open TD accounts easily at these authorized locations with simple KYC documents (Aadhaar, PAN/photo optional, address proof).
Post Offices: All head and sub-post offices across India, ideal for rural access, cash deposits accepted.
No banks involved: Exclusively through India Post branches.
Online via IPPB: India Post Payments Bank app or portal using Aadhaar eKYC for select services (no branch visit needed for deposits).
Documents Required: TD Account Opening Form, identity proof, address proof, 2 photos, nominee details, minors need guardian ID.
Deposit Methods: Cash/cheque at branch, transfer from linked post office savings account, passbook issued for tracking.
Guardian opens for minors, transfer accounts between post offices anytime.
Eligibility Criteria
TD welcomes nearly all Indian residents, regardless of age, job, or income, for inclusive savings.
Kids (Minors under 18): Parents/legal guardians open and operate, child controls at 18.
Youth/Adults (18+): Students, employed, self-employed, homemakers all qualify.
Unemployed: Jobless youth, homemakers, or gap-year individuals—no salary proof needed.
Senior Citizens (60+): No age cap, ideal for retirees.
One account per person or joint (up to 3 adults), no PAN-based limit like PPF.
Who is Not Eligible
Restrictions ensure focus on resident individuals.
NRIs: Cannot open new accounts, existing ones continue till maturity without fresh deposits.
Foreign Citizens/PIO/OCI: Unless Indian resident.
Institutions: Trusts, societies, companies, or firms cannot open accounts (only individuals).
HUFs: Not permitted, individual/joint only.
Example
In a family of 6—Father, Mother, and 4 kids (ages 3, 6, 9, 12)—each can open separate TD accounts without combined limits.
Key Rule: No PAN-group cap—invest as much as desired per account (min ₹1,000, no max), split wisely across tenures.
Father’s Accounts: Personal 5-year TD ₹2 lakh; Kid 1’s 3-year ₹1 lakh.
Total for Father: No limit, full interest applies.
There is no rule to share equally, they can invest any amount (min ₹1,000 per account to max unlimited).
Mother’s Accounts: Personal 2-year ₹1.5 lakh; Kid 3’s 1-year ₹1 lakh.
Total for Mother: No limit, flexible tenures.
Key Features
Interest Rate: 6.9%-7.5% p.a. for FY 2025-26 (Q4), reviewed quarterly, compounded quarterly.
Tenure: 1, 2, 3, or 5 years from date of deposit, no extensions.
How Interest Works in TD
Interest Rate: Set by government quarterly, current slabs: 1-yr 6.9%, 2-yr 7.0%, 3-yr 7.1%, 5-yr 7.5% p.a.
Compounding Frequency: Quarterly compounding, payable annually.
Calculation Basis: Simple interest per quarter on principal, credited yearly.
Crediting: Interest added annually to principal or transferable to savings account.
Taxation: Interest taxable as “Income from Other Sources”; TDS if >₹40,000/year (₹50,000 seniors); 5-yr eligible for 80C.
Impact of Deposits Timing: Lump-sum only, earns from deposit date.
No Risk: Returns guaranteed by government, principal fully safe.
How to calculate?
Calculate using TD calculator.
Example 1: Full ₹1.5 Lakh in 5-year TD (Lump sum—Earns max interest).
Total tenure: 5 years.
Result: Maturity ≈₹2.20 lakhs (Principal ₹1.5L + Interest ₹0.70L).
Example 2: ₹1 Lakh in 3-year TD.
Total tenure: 3 years.
Result: Maturity ≈₹1.23 lakhs (Principal ₹1L + Interest ₹0.23L).
Example 3: ₹2 Lakh in 1-year TD.
Tenure: 1 year.
Result: Maturity ≈₹2.14 lakhs (Principal ₹2L + Interest ₹0.14L).
Loans, Withdrawals & Extensions (Flexibility)
Loans from TD:
Not available.
Withdrawals from TD:
Premature after 6 months (penal rates apply).
When? After 6 months.
How much? Full amount.
Penalty: <1 yr: Savings rate (4%); after: TD rate -2%. Limit: One-time closure.
Example: Opened April 2025 ₹1 lakh 3-yr TD. In Oct 2025 (after 6 months), close at savings rate.
Extension After Tenure:
No auto-extension, renew manually or withdraw at maturity.
Options: Close and reinvest in new TD, no ongoing deposits post-maturity.
Example: 5-yr TD opened 2025 matures 2030—withdraw full or renew.
Common Mistakes & Penalties (Avoid these)
Premature Closure: Penal interest, no loans confuse with other FDs.
Low Awareness: Check quarterly rates before investing.
TDS Surprise: File ITR to claim credit on tax deducted.
TD Example (₹1.5 lakh annual for 5 years at 7.5%)
| Year | Amount Invested (₹) | Cumulative Investment (₹) | Approx. Balance at Year End (₹) | Tax Saved (₹) |
|---|---|---|---|---|
| 1 | 1,50,000 | 1,50,000 | 1,61,250 | 45,000 |
| 2 | 1,50,000 | 3,00,000 | 3,27,656 | 45,000 |
| 3 | 1,50,000 | 4,50,000 | 4,99,431 | 45,000 |
| 4 | 1,50,000 | 6,00,000 | 6,87,842 | 45,000 |
| 5 | 1,50,000 | 7,50,000 | 8,84,300 | 45,000 |
Final Totals
Total Investment: ₹7,50,000
Maturity Value (after 5 years): ₹8,84,300
Interest Earned: ₹1,34,300 (taxable)
Tax Saved (30% bracket): ₹2,25,000
Who saves ₹45,000 per year?
Only people earning more than ₹12 lakh (opting for old tax regime) save full ₹45,000/year on 5-yr TD.
| Tax Slab | Annual Tax Saved (₹) | Total Tax Saved in 5 yrs (₹) | Total Investment (₹) | Maturity Value (₹) | Interest Earned (₹) |
|---|---|---|---|---|---|
| 0% (Income ≤ ₹5 lakh) | 0 | 0 | 7,50,000 | 8,84,300 | 1,34,300 |
| 20% (Income ₹5–10 lakh) | 30,000 | 1,50,000 | 7,50,000 | 8,84,300 | 1,34,300 |
| 30% (Income > ₹12 lakh) | 45,000 | 2,25,000 | 7,50,000 | 8,84,300 | 1,34,300 |
This is all about TD investment scheme in India.
India Post Time Deposit is a safe, flexible, and reliable savings option for conservative investors—offering guaranteed returns, easy access across India, tax benefit on 5-year deposits, and suitability for families, seniors, and goal-based savings without market risk.
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