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Post Office Time Deposit (5 years)

Government of India — small savings scheme · Government & Post Office Schemes

A five-year deposit, like a bank fixed deposit but with the post office, paying a notified rate and qualifying for a tax deduction.

7.50% Interest rate · Notified quarterly; current for Oct–Dec 2026

As of 1 Oct 2026. Rates change — check the source before acting.

Source: National Savings Institute · confirmed via Outlook Money, 1 October 2026

Source India Post — saving schemes

www.indiapost.gov.in/banking-services/savings

The official page listing every post office savings scheme, with the current rates and rules.

How it works

Post Office Time Deposit (5 years) is a government schemes product from Government of India — small savings scheme, in the guaranteed category: fixed by contract. A five-year deposit, like a bank fixed deposit but with the post office, paying a notified rate and qualifying for a tax deduction.

Because the return type is guaranteed, the questions that matter most are: Is the rate fixed for the whole tenure, or revised during it? Who is actually promising to pay, and what happens if they don't?

  • A tax-deductible alternative to a bank fixed deposit
  • A known sum at a known date, with no market risk

Key facts

Provider
Government of India — small savings scheme
Source
India Post — saving schemes ↗ https://www.indiapost.gov.in/banking-services/savings
Rate
7.50% Interest rate, as of 1 Oct 2026
Category
Government & Post Office Schemes
Minimum investment
₹1,000 and in multiples of ₹100; no upper limit
Tenure
5 years
Payout
Interest credited annually
Eligibility
Resident individuals, singly or jointly, and some institutions. A guardian can open one for a minor.
Getting your money back
Premature closure is allowed after six months, at a reduced rate. Closing within the first six months earns no interest.
Protection
A sovereign liability of the Government of India.
Tax
The five-year deposit qualifies for a deduction under Section 80C. Interest is taxable as income and may attract tax deducted at source.

What can go wrong

  • Closing early reduces the rate you actually earned, sometimes sharply.
  • Interest is taxable, so the post-tax return is below the headline rate.
  • The rate is fixed for the term; a later deposit may earn more or less.

Before you decide anything

  • Whether interest is reinvested or paid into your account, and how that is taxed
  • The rate that applies if you close the deposit early

These are questions to take to the provider, not a checklist that makes a product suitable. Whether something fits your situation is a decision only you — or an adviser you choose — can make.

Official sources

These link to the regulator or provider where the rules for this type of product are set out. They are the pages worth checking before you act, because they are the ones that get updated.

Other products in this category

The same rules and the same kind of trade-offs, described the same way.