Savings scheme

TD Small Savings Plan (Fixed Deposit Account) at a Post Office: Latest Interest Rates

Small postal savings plans: interest on the TD account is compounded quarterly

Since January 1, an investment in a term account at a post office earns 7% over a lock-up period of 1 to 3 years. In other words, term deposits – or term deposits – with terms of one year, two years and three years earn 7 percent interest at the post office. For the quarter ending March 31, money in one-year, two-year and three-year TD accounts will bear interest at the rate of 7%, according to the India Post website – indiapost.gov.in. (Also read: Government announces interest rates for small savings plans for March quarter)

Here are five things to know about term deposits and other small savings plans:

1. A TD term deposit or account can be opened for four term options: one year, two years, three years and five years. Interest on the TD Account is compounded quarterly.

2. Of these, the one-year and two-year term accounts bore interest at rates of 6.9% and 7.2% respectively during the October-December quarter. A TD account with a five-year maturity continues to earn 7.8% interest, according to the Post’s website.

3. The government reviews the interest rates applicable to small savings plans on a quarterly basis. The Ministry of Finance last year raised interest rates for small savings plans to 0.4% for the October-December quarter.

4. For the quarter ending March 31, the government only changed the interest rates applicable to one-year and three-year term deposits, while keeping those of the other small savings plans unchanged.

5. The government offers nine types of small savings schemes, such as time deposit, savings account, recurring deposit, savings scheme for the elderly (SCSS), public provident fund and National Savings Certificate (NSC).


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