Popular schemes are available from the post office. The National Savings Time Deposit Account is one of them (TD). It is similar to a standard fixed deposit (FD).
Investors can open accounts for one year, two years, three years, or five years.
INVESTMENT
A National Savings Time Deposit Account can be started with as little as Rs 1000 and as much as Rs 100 in multiples of Rs 100.
There is no maximum investment restriction.
INTEREST
1. Interest is paid on a yearly basis but is computed on a quarterly basis.
2. For a one-year account, an annual interest rate of 5.5 per cent is charged.
3. A two-year account may earn 5.5 per cent each year in interest.
4. The interest rate on a three-year account remains 5.5 per cent.
5. On a five-year account, an interest rate of 6.7% is applied.
MATURITY
The deposit amount will be repaid after one year, two years, three years, and five years from the date of opening.
WITHDRAWAL
No withdrawals are permitted before the six-month period from the date of deposit has expired.
If the TD account is closed between 6 and 12 months, the Post Office savings account interest rate of 4% will apply.
BENEFITS FROM INCOME TAXATION
The 5 year TD investment qualifies for the benefit of section 80C of the Income Tax Act of 1961.