5 year FD interest rate in post office: the tax saver deposit

5 year FD interest rate in post office, in rupees

Interest is worked out every quarter and paid out once a year, so these are payouts, not a compounded maturity value. If you reinvest each payout, you end with more. Try your figures in the FD calculator.

The tax deduction and its limits

Your deposit in the 5 year TD counts toward the ₹1.5 lakh yearly deduction that used to be section 80C, now section 123 with Schedule XV, provided your return uses the old regime. The same ₹1.5 lakh is shared with PPF, NSC, life insurance premiums, EPF and other items.

• You pay slab tax on every year's interest.
• Under the new regime there is no deduction, so the 5 year TD is just a regular deposit.

Lock in: why the 5 year FD is harder to break

Because it carries a tax benefit, the 5 year time deposit is meant to stay put. Early closure is restricted more than for shorter TDs, and when allowed, it pays a lower rate for the time completed. A deduction you already claimed may also be reversed in some cases. Treat this deposit as untouchable for five years.

5 year FD vs NSC: which tax saver is better

NSC usually wins unless you want the yearly interest in hand. Read more on the NSC post office page.

Post office 5 year FD vs bank tax saver FD

Banks offer a 5 year tax saver FD with the same deduction. Large banks have often trailed the post office by a small margin; some banks pay seniors more. Deposit insurance covers the bank version to ₹5 lakh, while the post office deposit is owed by the government. Both are locked for five years.

Questions people actually ask about the 5 year TD

• Post office 50,000 FD interest rate for 5 years? Same 7.5%; ₹50,000 earns about ₹3,857 a year.
• Is the 5 year rate fixed? Yes, for the full five years.
• Can women or seniors get more? No. Everyone gets the same rate.
• Can I add money later? No. Each deposit is a separate account; open another for new money.

For the other terms and the full rate table, visit the post office FD interest rate hub, and for the scheme rules, the time deposit guide.

Other ways people ask about the 5 year deposit

The 5 year TD interest rate in post office, the 5 year FD interest rate in post office and the post office FD interest rate for five years are one and the same number, 7.5%. A post office fixed deposit scheme for 5 years is the same product as the 5 year time deposit; there is no separate scheme with a different name or rate.

Because many savers open one every March to finish their tax planning, the counter can be busy in the last weeks of the financial year. Opening it online through India Post internet banking, if you have it, avoids the queue.