Post Office Fixed Deposit (POFD) or also called Post Office Time Deposit (POTD) is one of the oldest and most preferred forms of investment offered by the Indian Postal Services. They are considered as safe as it is backed by the Government of India and is the best fit for risk-averse investors. Like banks FD, you can always calculate the interest amount by using a post office FD calculator in a hassle-free manner.

Post Office Fixed Deposit is similar to a regular bank deposit where the money is deposited for a fixed tenure and interest rate. The higher the investment tenure, the higher is the interest rate offered. The investor can earn a guaranteed return on the money deposited.

Post Office Fixed Deposit Interest Rates 

Post office Fixed deposits are available in four tenures, viz. 1, 2, 3, and 5 years; each has its own preset interest rate. The interest is payable annually but calculated quarterly. The interest paid on a fixed deposit by the post office is subject to TDS. A 5-year post office FD can be used for tax saving purposes under section 80C of the Income Tax Act. The interest rates for different tenures for post office FD are as follows:

Tenure Rate Offered
1 Year 6.90%
2 Years 6.90%
3 Years 6.90%
5 Years 7.70%

Key Features of Post Office FD

  • Offers multiple tenures, viz. 1, 2, 3, and 5-year time deposits.
  • Interest is paid out annually but calculated quarterly.
  • The scheme is best fit for investors with a low-risk appetite as it not only provides low risk but also offers high capital protection as it is backed by the government. The principal amount thus grows at a predetermined rate with guaranteed returns.
  • The interest rate for a five-year term deposit scheme is notified before April 1 every year.
  • An individual can take a loan against the deposit or withdraw the deposit prematurely as per convenience.

How to Calculate Interest on Post office FD?

Calculating post office FD interest payout is pretty simple; all you have to do is use the compound interest formula given below for all the required details.

Maturity Value = Principal * (1 + Interest Rate/4)^(n*4)

Where n is the number of years

And the interest rate should be the annual rate. Please note that the above formula is for interest compounded quarterly

Example: Suppose a person has deposited 1 lakh at 7.8% interest for 5 years term, the maturity amount would be

Maturity value = 1,00,000 * (1+.078/4) (5*4)

Maturity Value = Rs. 1,47,145

Post Office FD Investment Rules

The customer has to invest a minimum deposit amount of Rs. 200 and thereafter, in multiples of INR 200. Usually, one person can open only one fixed deposit account in the same bank, however, multiple FD accounts can be opened in post offices.

One can also open a post office FD in all public and private sector banks. One of the best features of a post office FD account is it can be transferred from one post office to the other. You cannot withdraw the amount before the first 6 months. After that, premature withdrawal is available at a penalty of 1%. Once the FD matures, one has got two options, viz.

Either it can be renewed for the same tenure or can be withdrawn. Post Office FD best suits highly conservative investors who want to invest a lump sum amount. The interest rates offered by post office FDs are sometimes higher than Bank FDs. An investor can take a loan against FD by requesting the post office.

Benefits of Using Post Office Fixed Deposit Calculator

Some of the upsides of using this calculator are listed down here

  • No erroneous calculation since it’s an automatic calculator
  • Making complicated calculations hassle-free at multiple tenures, amount and interest rates, thus saving time and effort
  • The tool is absolutely free of cost thus you can use it as many times as you want and compare returns for different combinations of FD rates, tenure and amount

Post Office FD Calculator 2021 – FAQs

Que. How to Calculate the maturity amount using the post office FD calculator?

Ans. To use the FD calculator available here, one should need to have the following details beforehand:

  • Total investment (the amount you invested)
  • Number of years (Tenure in years)
  • Rate of interest

Once all these details are filled in respectively, the only step left is to hit the ‘Calculate’ button post which a ‘total value’ shall be displayed just below the calculator. The fields shall reflect the total investment, maturity amount, the rate of interest, and the number of years.

Que. What is the minimum amount to open a Post office Fixed Account?

Ans. The minimum amount required to open an FD account in the post office is ₹200 and in multiples thereof. However, there is no upper limit on the deposit amount.

Ques. Is the interest earned on Post office FD taxable?

Ans. Yes, the interest income is taxable.

Que. Do post offices allow premature withdrawal of the FD amount?

Ans. Premature withdrawal or closure of the post office FD account is permitted after the completion of six months of opening the deposit. If a time deposit with two or three years tenure is withdrawn prematurely, interest will be paid only for the completed years.