Post Office Time Deposit (POTD) Calculator
Calculate maturity payout for 1, 2, 3, and 5-year Post Office Term Deposit accounts with quarterly compounding.
Post Office Time Deposit (POTD) Calculator
Calculate interest and maturity proceeds for India Post's National Savings Time Deposit Account (1, 2, 3, and 5-Year terms). Features quarterly compounding, annual interest payout vs. cumulative growth, Section 80C tax deduction for 5-Year deposits, and Section 80TTB senior citizen tax exemptions.
Deposit & Tax Parameters
Maturity Proceeds & Return Overview
Annual Accrual & Tax Liability Schedule
Compounding Frequency: Quarterly (4 times p.a.)| Year | Opening Principal (₹) | Quarterly Compounded Interest (₹) | Annual Payout / Accrual (₹) | Sec 80TTB Exemption (₹) | Tax Liability (₹) | Closing Balance (₹) |
|---|
Institutional Comparison: Post Office TD vs. Bank FD vs. NSC
| Feature / Parameter | Post Office Time Deposit (POTD) | Commercial Bank Fixed Deposit | National Savings Certificate (NSC) |
|---|---|---|---|
| Sovereign Backing | 100% Government of India Sovereign | DICGC Insured up to ₹5 Lakh per bank | 100% Government of India Sovereign |
| 5-Year Interest Rate | 7.5% p.a. (Quarterly Compounded) | 6.5% – 7.25% p.a. (Bank specific) | 7.7% p.a. (Annually Compounded) |
| Section 80C Tax Benefit | Eligible on 5-Year TD only (up to ₹1.5L) | Eligible on 5-Year Tax-Saving FD (5-year strict lock-in) | Eligible on initial principal + Years 1–4 interest |
| TDS Deduction at Source | Zero TDS (No deduction under Sec 194A) | 10% TDS if interest > ₹40,000 (₹50k for seniors) | Zero TDS (Depositor self-assesses tax) |
| Interest Payout Frequency | Paid annually into Post Office Savings Account | Monthly, Quarterly, or Cumulative at maturity | Cumulative only (Paid at maturity after 5 years) |
| Premature Withdrawal | Allowed after 6 months (with penalty rules) | Allowed with 0.5% – 1% penalty (Except Tax Saver) | Strict lock-in (Allowed only upon death/court order) |
Comprehensive Post Office Time Deposit (POTD) Guide
The National Savings Time Deposit Account (POTD) is one of India's premier sovereign-backed fixed-income instruments. Backed by the Ministry of Finance and distributed nationwide through India Post's branch network, it offers guaranteed fixed yields across four statutory tenures: 1 Year, 2 Years, 3 Years, and 5 Years.
Statutory Compounding Formulation
Under India Post savings bank general rules, interest on POTD is compounded quarterly ($n = 4$ times per year) and paid annually. The statutory formula for quarterly compounding is:
Cumulative Maturity Value = Principal × (1 + r / 400)^(4 × t)
Because of quarterly compounding, an advertised nominal rate of 7.5% per annum produces an Effective Annual Rate (AER) of 7.71%. On a ₹1,00,000 deposit, the annual interest payout is ₹7,714 each year.
Section 80C Tax Exemption & 80TTB Senior Citizen Relief
- 5-Year Tenure 80C Benefit: Investments in the 5-Year Time Deposit qualify for deduction under Section 80C of the Income Tax Act up to ₹1,50,000 per financial year under the Old Tax Regime. 1, 2, and 3-Year Time Deposits do NOT qualify for 80C deduction.
- Zero TDS at Source: Unlike commercial banks which deduct 10% TDS under Section 194A when annual interest exceeds ₹40,000 (₹50,000 for senior citizens), India Post does NOT deduct TDS at source. Full interest is credited directly to your savings account.
- Section 80TTB for Senior Citizens: Resident individuals aged 60 and above can claim a deduction of up to ₹50,000 on total interest earned from Post Office and bank deposits under Section 80TTB.
Statutory Premature Closure Rules
Frequently Asked Questions (FAQs)
What is the minimum and maximum deposit limit in Post Office Time Deposit?
The minimum deposit amount is ₹1,000, and further deposits can be made in multiples of ₹100. There is no maximum investment limit under government regulations.
Can I open joint accounts or accounts for minors in POTD?
Yes. A POTD account can be opened as a Single Account, Joint Account (up to 3 adults, Joint A or Joint B), or by a guardian on behalf of a minor or person of unsound mind. A minor above 10 years of age can also open and operate an account in their own name.
How does quarterly compounding affect the annual interest payout?
Even though interest is paid out once a year, it is compounded every 3 months (quarterly). For example, at a 7.5% annual rate, the quarterly compounding factor is (1 + 7.5/400)⁴ = 1.077136. This increases the effective annual yield (AER) to 7.71%, resulting in ₹7,714 annual interest per ₹1 Lakh deposited.
Can POTD accounts be transferred between different Post Offices?
Yes. A Post Office Time Deposit account can be transferred from one Post Office to another anywhere across India by submitting a transfer application along with the passbook at the home or destination post office branch.
Can I pledge my POTD account as collateral for a bank loan?
Yes. POTD accounts can be pledged or transferred as security to the President of India, Governor of a State, Reserve Bank of India, scheduled commercial banks, cooperative societies, or housing finance companies upon submitting the prescribed Form.
Is the interest from Post Office Time Deposit completely tax-free?
No. While India Post does not deduct TDS under Section 194A, the interest is not tax-exempt. It must be declared under 'Income from Other Sources' in your Income Tax Return (ITR) and is taxed according to your applicable slab rate, subject to Section 80TTB relief for senior citizens.