If you’re searching for a safe and guaranteed return investment option, the Post Office FD Yojana should be on your radar. Also known as the Post Office Time Deposit Scheme (POTD), it is a government-backed fixed deposit plan that offers attractive interest rates for tenures ranging from 1 to 5 years. But the real question many investors are asking is this: If I deposit Rs 7 lakh in one go, how much return will I get in 1 year, 2 years, and 5 years?
Post Office FD Yojana
| Feature | Details |
|---|---|
| Scheme Name | Post Office Time Deposit (POTD) |
| Investment Amount Example | Rs 7,00,000 lump sum |
| Interest Rates (April-June 2025) | 1-Year: 6.9%, 2-Year: 7.0%, 5-Year: 7.5% |
| Return in 1 Year | Rs 48,300 interest (approx) |
| Return in 2 Years | Rs 1,01,500 interest (approx) |
| Return in 5 Years | Rs 3,14,700 interest (approx) |
| Interest Payout | Annually |
| Tax Benefits | 5-year deposits qualify for Section 80C deductions |
| Official Website | India Post |
The Post Office FD Yojana is a trusted, low-risk investment that delivers decent returns with government-backed security. If you’re planning to invest Rs 7 lakh as a lump sum, the returns over 1, 2, and 5 years can be quite attractive. For those who value safety, regular income, and tax benefits, this is a worthy option to consider.
What is the Post Office FD Yojana?
The Post Office Fixed Deposit (FD) Yojana, officially known as the Post Office Time Deposit Scheme, is offered by India Post under the small savings schemes of the Government of India. This scheme works just like a bank FD but with more security, since it’s backed by the government.
You can choose from 1-year, 2-year, 3-year, or 5-year tenure. The longer the deposit term, the higher the interest rate you get. Unlike some bank FDs, the interest here is paid annually but compounded quarterly, which means you earn interest on your interest!
see also: Invest 1000 Rupees in This Post Office Scheme and Earn 8 Lakh Rupees
Latest Interest Rates for April to June 2025
As per the latest notification from the Ministry of Finance, here are the interest rates:
- 1-Year FD: 6.9% p.a.
- 2-Year FD: 7.0% p.a.
- 3-Year FD: 7.1% p.a.
- 5-Year FD: 7.5% p.a.
How Much Return Will You Get on Rs 7 Lakh?
Let’s break down the returns with simple examples. We assume annual compounding for clarity.
1-Year FD @ 6.9%
- Principal: Rs 7,00,000
- Interest: Rs 48,300 (approx)
- Maturity Amount: Rs 7,48,300
2-Year FD @ 7.0%
- Principal: Rs 7,00,000
- Interest (compounded): Rs 1,01,500 (approx)
- Maturity Amount: Rs 8,01,500
5-Year FD @ 7.5%
- Principal: Rs 7,00,000
- Interest (compounded): Rs 3,14,700 (approx)
- Maturity Amount: Rs 10,14,700
These figures are indicative. Actual maturity value may vary slightly due to compounding frequency.
Why Choose Post Office FD Over Bank FD?
- Government Guarantee: Backed by the Ministry of Finance, ensuring peace of mind.
- Better Rates: Often higher than many regular bank FDs.
- Section 80C Tax Deduction: Available only for the 5-year deposit.
- Accessible Nationwide: Available at over 1.5 lakh post offices.
- Nomination & Joint Holding: Available for families and senior citizens.
How to Open a Post Office FD
You can open an FD either offline or online:
Offline Method:
- Visit your nearest post office.
- Fill in the Form A for Time Deposit.
- Submit KYC documents (Aadhaar, PAN, Address Proof).
- Deposit the lump sum via cash, cheque, or online transfer.
Online Method (if you have an IPPB account):
- Log in to your India Post Payments Bank (IPPB) app.
- Select Post Office Schemes.
- Choose Time Deposit.
- Enter deposit amount and tenure.
- Confirm and submit.
Pro Tip: Link your mobile number with your Post Office account for SMS alerts and easy access.
Tax Implications You Should Know
- Interest Earned: Fully taxable as per your income slab.
- TDS: No TDS is deducted by the post office, but you must declare it in ITR.
- Section 80C: You can claim a deduction of up to Rs 1.5 lakh for 5-year FDs only.
Who Should Invest in Post Office FDs?
- Retirees & Senior Citizens: Seeking safe and stable returns.
- Conservative Investors: Wanting capital protection.
- Tax Savers: Looking for Section 80C benefits.
- Parents Planning for Education: Lock-in funds securely for a few years.
see also: Post Office PPF Scheme: Invest just ₹50k annually, become a millionaire in 25 years
Post Office FD Yojana FAQs
Q1. Can I withdraw my Post Office FD early?
Yes, but only after 6 months. If withdrawn between 6-12 months, the interest will be paid at the savings account rate.
Q2. Can I take a loan against my Post Office FD?
No, this feature is not available.
Q3. Is there a nomination facility?
Yes, you can nominate a family member at the time of account opening or later.
Q4. Are joint accounts allowed?
Yes, you can open a joint FD with up to 3 individuals.
Q5. What if I miss linking PAN?
If PAN is not linked and the interest exceeds Rs 40,000 in a year, higher TDS may apply during IT assessment.
