It is wise to open a Post Office Fixed Deposit (FD) account, as this financial instrument offers stability and competitive interest rates. A Post Office FD is a safe investment, and people deposit a lump sum amount for a fixed tenure between 1 and 5 years.
The Post Office FDs also have government support, so the investment is safe. Considering the low risk and consistent returns, it is wise for risk-averse investors to open a FD account. You can also check the FD Interest Rates before you start the investment. Also, you can check the best FD rates on the Wint Wealth official’s website and make the right decision.
In case you wish to know about the post office fixed deposit opening process, then in this post, we will understand the entire process.
What Is Post Office FD?
A post office FD account refers to a financial tool that facilitates depositing a sum for a specified period at an agreed interest rate. The investment remains locked in for the selected duration. During maturity, the depositor returns the principal amount plus the accumulated interest.
The government backs Post Office Time Deposits (POTD), popularly called Post Office Fixed Deposits. In the framework of this fixed deposit scheme, the investors can get an interest of up to 7.50% p.a. The tenures you can opt to deposit your money are 1 year, 2 years, 3 years, and 5 years.
Post Office FD Opening Process
In general, the process of FD opening involves visiting the nearest post office and filling out the application form with the necessary KYC documents and passport-sized photographs. The main benefit is the attractive interest rates, which are usually better than what the traditional banks offer.
Here, we will be discussing both online and offline methods of opening an FD account with the post office.
Online Method:
You can open a post office fixed deposit account using the Internet banking facility offered by the India Post Office. The steps are as follows:
- Open the official e-banking site of the post office at ebanking.indiapost.gov.in.
- Use your registered ID and password to sign in to the portal.
- Go with the ‘Service Request’ under the ‘General Services’ tab.
- Click on the ‘New Request’ option and follow the onscreen instructions to start the request for opening Post Office Fixed Deposit or Time Deposit.
Offline Method:
It is equally easy to open a Post Office Fixed Deposit offline.
- Find the nearest post office branch that provides FD services.
- Collect the FD account opening form. So you can get it from the branch or download it from their website.
- Complete the form with the correct information and attach a passport-sized photo.
- Submit the duly filled form and the necessary documents to the Post Office staff.
- Pay the required amount in cash or any other method acceptable.
- You will then get the FD account number and a deposit receipt.
Noteworthy Features of Post Office FD
| Investment Duration | 1 year, 2 years, 3 years, and 5 years |
| Minimum deposit | Rs.1,000 |
| Payment mode | Cheque, Cash, and Online Payment |
| Interest calculation and credit | Annual |
| Withdrawal before maturity | Allowed; Only after 6 months from the date of FD opening |
| Special Interest Rates for Senior Citizens | Not Applicable |
| Tax Benefits under Section 80C | Applies only for 5-year Fixed Deposits |
Important information about premature withdrawal: If your Post Office Fixed Deposit account’s tenure is between 1 year to 5 years, then there are some rules that will be applicable if you wish for premature withdrawal:
- An early closing will not be permissible for not less than 6 months after the date of the Fixed Deposit account is opened.
- If the withdrawal is made within 6-12 months of the opening date, the rate of interest that will be applied to the invested amount will be at per with the Post Office Savings Account.
Post Office FD Interest Rates
The current prevailing FD interest rates by the post office are as follows:
| Investment Tenure | Interest Rate |
| 1 year | 6.90% |
| 2 years | 7.00% |
| 3 years | 7.00% |
| 5 years | 7.50% |
Documents Required For Opening Post Office FD
| Particulars | Document Type |
| Identity proof | Voter’s ID card, Aadhaar card, etc. |
| Address proof | Aadhaar card, utility bills (such as water bill, electricity bill), ration card, etc. |
| Mandatory Document | PAN card |
| Photographs | 2 recent passport-sized photographs |
Eligibility To Open Post Office FD
| Particulars | Eligibility |
| Single adult | Must be 18 years old |
| Minors | Must be more than 10 years old |
| Minors (less than 10 years old) | Legal guardian can open FD account |
| Unsound mind person | Legal guardian can open FD account |
Features of Post Office Fixed Deposit
- Guaranteed Returns: With Fixed Deposits, you receive guaranteed returns on your investment, which ensures financial safety.
- Flexible Tenure Options: Customers have a choice regarding tenure and can choose any tenure options per their financial planning.
- Nomination Facility: It offers the nomination facility for FD accounts to enable a smooth account transition in case of any unfortunate event.
- Minimum & Maximum Deposit Amount: The minimum deposit amount is Rs. 1,000, and there is no restriction on the maximum amount you can deposit.
Benefits of Post Office FD
- Safety and Reliability: These FDs are one of the safest investments in India, backed by the government.
- Steady Income Stream: Depositors receive interest payments at a fixed rate after specific intervals of time, which ensures a regular flow of income.
- Easy Application Process: FD in Post Office can be opened without any trouble and so is available to all.
- Tax-Saving Opportunities: Post Office Fixed Deposits have tax-saving benefits of Section 80C of the Income Tax Act, 1961.
- Great Option for Risk-Averse Investors: These FDs are a perfect choice for risk-averse people who would like to receive steady returns without any risk on their investment.
Conclusion
The opening of post office account, which offers an interest rate that is more competitive than other financial institutions and with the security of government support, is an appealing alternative for the risk-averse investor. When people use this chance, they can get a regular source of income and contribute to financial stability at the same time.
In addition, the post office FD makes an excellent form of diversification of one’s investment portfolio. Therefore, open an FD account today at your nearest post office. Otherwise, one can check the Wint Wealth website for superior alternatives to the FD at excellent interest rates.
