Post Office FD Calculator

What is a Post Office Fixed Deposit?

A Post Office Fixed Deposit (POFD) is a savings scheme offered by India Post under the Post Office Time Deposit Scheme. It allows you to deposit a lump sum amount for a fixed tenure and earn guaranteed interest. Post Office FDs are backed by the Government of India, making them one of the safest investment options available.

How to Use This Calculator

1. Enter Deposit Amount: Input the principal amount you wish to invest (minimum ₹1,000)
2. Select Tenure: Choose from 1, 2, 3, or 5 year terms
3. View Interest Rate: The calculator automatically applies the current applicable rate
4. Review Results: See your maturity amount, total interest earned, and year-by-year growth

Understanding Your Results

Maturity Amount

The total amount you'll receive when the FD matures, including your principal and all earned interest.

Interest Earned

The total interest accumulated over the deposit tenure through quarterly compounding.

Effective Yield

The actual annual return considering quarterly compounding, which is slightly higher than the stated rate.

Post Office FD Interest Rates (2025)

Note: Rates are subject to revision by the Government of India every quarter

Post Office FD Formula

Post Office FDs use quarterly compounding. The maturity value is calculated as:

M = P × (1 + r/4)^(n×4)

Where:

• M = Maturity Value
• P = Principal (deposit amount)
• r = Annual interest rate (as decimal)
• n = Number of years
• 4 = Quarterly compounding (4 times per year)

Example Calculation

Deposit: ₹1,00,000 for 5 years at 7.5%

M = 1,00,000 × (1 + 0.075/4)^(5×4) M = 1,00,000 × (1.01875)^20 M = 1,00,000 × 1.4493 M = ₹1,44,930

Key Features of Post Office FDs

Safety & Security

• Government Backed: 100% safe as backed by Government of India
• Sovereign Guarantee: Unlike bank FDs, there's no deposit insurance limit

Attractive Returns

• Competitive interest rates compared to many bank FDs
• Quarterly compounding increases effective yield

Tax Benefits

• 5-Year FD: Eligible for tax deduction under Section 80C (up to ₹1.5 lakh)
• TDS applicable on interest exceeding ₹40,000 per year

Flexibility

• Minimum deposit: ₹1,000 (in multiples of ₹100)
• No maximum limit on investment
• Available tenures: 1, 2, 3, and 5 years

Post Office FD vs Bank FD

Eligibility & Rules

Who Can Open?

• Single adult account
• Joint account (up to 3 holders)
• Guardian on behalf of minor
• Minor above 10 years (self-operation)

Premature Withdrawal

• Allowed after 6 months from deposit date
• Penalty: 1% deduction from applicable rate
• After 1 year: Interest paid at rate applicable for completed period minus 1%

Loan Facility

• Loan available against FD after 6 months
• Up to 50% of principal amount
• Interest: 2% above FD rate

Renewal

• Auto-renewal not available
• Must be renewed within specified grace period
• Grace period varies by tenure

How to Open a Post Office FD

1. Visit Post Office: Go to your nearest post office branch
2. Fill Form: Complete Post Office TD Account Opening Form
3. Submit Documents: KYC documents (Aadhaar, PAN, photos)
4. Make Deposit: Pay the deposit amount (cash/cheque/online)
5. Get Receipt: Collect the FD receipt/certificate

Online Opening

Post Office FDs can also be opened online through:

• India Post Mobile Banking App
• Internet Banking (if registered)
• IPPB (India Post Payments Bank) linked accounts

Tax Implications

TDS on Interest

• TDS at 10% if interest exceeds ₹40,000/year (₹50,000 for seniors)
• Submit Form 15G/15H to avoid TDS if income is below taxable limit

Section 80C Benefit

• Only 5-year FD qualifies for Section 80C deduction
• Maximum deduction: ₹1,50,000 per financial year
• Lock-in period: 5 years (no premature withdrawal)

Interest Taxation

• Interest income is fully taxable
• Added to your income and taxed as per your slab
• Report under "Income from Other Sources"

Tips for Maximizing Returns

1. Choose Longer Tenure: 5-year FDs offer the highest rate (7.5%)
2. Claim Tax Benefits: Use 5-year FD to save tax under 80C
3. Avoid Premature Withdrawal: Penalty reduces your effective return
4. Compare Options: Check current bank FD rates before investing
5. Consider Laddering: Split investment across multiple FDs with different maturities

Frequently Asked Questions

What is the minimum amount for Post Office FD?

The minimum deposit is ₹1,000, with subsequent investments in multiples of ₹100.

Is Post Office FD safer than bank FD?

Yes, Post Office FDs are backed by the Government of India without any deposit limit, while bank FDs are insured only up to ₹5 lakh through DICGC.

Can I break my Post Office FD before maturity?

Yes, premature withdrawal is allowed after 6 months with a penalty of 1% below the applicable rate.

Is there any tax benefit on Post Office FD?

Only the 5-year FD qualifies for tax deduction under Section 80C up to ₹1.5 lakh per year.

How is interest calculated on Post Office FD?

Interest is compounded quarterly but paid annually. This means interest is calculated 4 times a year and added to your principal.

Do senior citizens get higher rates on Post Office FD?

Unlike banks, Post Office FDs do not offer additional interest rates for senior citizens. Senior citizens can consider the Post Office Senior Citizens Savings Scheme (SCSS) for higher rates.

Can NRIs open Post Office FD?

No, Post Office Fixed Deposits are available only to resident Indians.

Disclaimer: Interest rates are subject to change every quarter. Always verify the current rates at your local post office or on the India Post website before investing. This calculator provides estimates for educational purposes only.