Do you think post offices only offer courier services? Nope! The Department of Posts also runs several small savings schemes (also known as National Savings Schemes). They allow fixed-income investors to earn guaranteed returns on their investments. These schemes are managed by the National Savings Institute, which comes under the Union Ministry of Finance.
Now, out of the many options is the National Savings Time Deposit (TD). It is a Post Office FD scheme where you can invest from 1 year to 5 years. As of September 19, 2025, you can earn up to 7.70% p.a. on a 5-year TD. These deposits are 100% backed by the Government of India, so your money is fully secure. This makes them one of the safest ways to save.
Need more information? Read this article to know everything about the post office FD scheme.
Latest Post Office FD Interest Rate 2025
In the Post Office FD scheme, you can invest for 1 year, 2 years, 3 years, or 5 years. The interest rates are revised quarterly by the Government of India. However, the interest rate once booked remains fixed for the entire investment duration.
It is worth mentioning that the Post Office FD interest rates have remained stable for the past seven quarters. The last modification in the rates was made for the fourth quarter of 2023-24. Now, the interest rates are again subject to revision on September 30, 2025.
For your reference, below are the latest post office FD interest rates (applicable from July 1, 2025, to September 30, 2025):
| FD Tenure | Interest Rates |
|---|---|
| 1 year | 6.90% |
| 2 year | 7.00% |
| 3 year | 7.10% |
| 5 year | 7.50% |
Please note that the 5-year TD also qualifies as a tax-saving investment under Section 80C of the Income Tax Act. 100% of the amount invested in this scheme can be deducted from your taxable income up to ₹1.5 lakhs in a financial year.
What is the Role of Bond Yields in Deciding Post Office FD Interest Rate?
As an investor, you must realize that Post Office FD interest rates are designed to move in line with “government bond yields”. For those unaware, these are returns on government securities, called G-secs.
Now, these G-sec returns are linked to repo rate movements and are used by the government as a benchmark for setting interest rates on small savings schemes like National Savings Time Deposit (TD). For example,
- Say the 5-year government bond (G-sec) is giving 7.25% p.a.
- Now, the Post Office 5-year TD will usually be set at that rate + 0.25% p.a. extra (known as a spread).
- Thus, the final interest rate offered to investors will be 7.50% p.a.
However, be aware that the final decision rests with the government, and it can keep rates higher or lower depending on policy needs.
Who Can Invest in the Post Office FD Scheme?
A post office term deposit can be opened in various modes:
| Mode I: Single Account | Mode II: Joint Account | Mode III: Minor Accounts |
|---|---|---|
| Any resident Indian adult can open a single account in his or her name. |
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Looking for more fixed income options? Explore the GoldenPi platform and check out some popular non-market-linked options offered by leading small finance banks and NBFCs.
What are the Post Office FD Break Rules?
The Post Office FD scheme carries a sovereign guarantee and offers guaranteed returns. However, it has strict rules if you want to take out money before the maturity date. These rules decide whether you get reduced interest or only savings account interest.
Let’s check out the latest premature withdrawal rules for post office FDs:
| FD Tenure | When you can close | Interest you will get |
|---|---|---|
| Any duration | Cannot withdraw before 6 months from the date of deposit. |
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| 1/2/3 years | Closed after 6 months but before 1 year. |
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| 2 years or 3 years | Closed after 1 year but before maturity. |
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| 5 years | Cannot be closed before 4 years. |
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Can the Post Office FD Scheme Be Extended?
When a Post Office FD matures, you don’t have to withdraw it immediately. You can extend it for a specified tenure. However, there are rules on how and when this extension can be done. Let’s check them out:
| Original Tenure | Time limit to request an extension after maturity | Extension allowed | Interest rate applicable |
|---|---|---|---|
| 1-year FD | Within 6 months | Can extend for another 1 year | Rate on maturity date for 1-year FD |
| 2-year FD | Within 12 months | Can extend for another 2 years | Rate on maturity date for 2-year FD |
| 3-year FD | Within 18 months | Can extend for another 3 years | Rate on maturity date for 3-year FD |
| 5-year FD | Within 18 months | Can extend for another 5 years | Rate on maturity date for 5-year FD |
Please note that, as per the current rules (applicable as of September 19, 2025), an FD can be extended only twice after the original maturity date.
Want More Options? Book Leading Bank and NBFC FDs Online Using the GoldenPi Platform!
National Savings Time Deposit is a Post Office FD scheme offering non-market-linked returns with a sovereign guarantee. As of September 19, 2025, investors can earn between 6.90% and 7.70% per annum for tenures ranging from 1 to 5 years. The interest is compounded quarterly and paid annually.
It is a safe choice for conservative and low-risk investors who prioritise capital protection and want to earn a guaranteed income.
If you are looking for more such options, you may also look at fixed deposits from leading small finance banks and NBFCs such as Suryoday Small Finance Bank, Bajaj Finance, Shriram Finance, and more. To explore the latest interest rates and to start your application process online, you can visit the GoldenPi platform.
Post Office FD Interest Rate FAQs
Are Post Office FDs safe?
Yes! Post Office FDs carry a sovereign guarantee, which means your money is fully backed by the Government of India. This makes them even more secure than bank deposits as they are only insured up to ₹5 lakhs by the Deposit Insurance and Credit Guarantee Corporation (DICGC).
What is the maximum Post Office FD amount limit in 2025?
There is no maximum limit on investments in the National Savings Time Deposit scheme. You can deposit as much as you want, either in a single account or across multiple accounts.
What extra do senior citizens get in the Post Office FD scheme?
Unlike banks, the Post Office FD scheme does not offer additional interest to senior citizens. The rates are the same for all investors, whether above or below 60 years of age.
To specifically enjoy higher interest rates, senior citizens may invest in Senior Citizens Savings Schemes (SCSS). As of September 19, 2025, SCSS is offering an interest rate of 8.20% p.a. with quarterly payouts.
Is interest compounded quarterly in Post Office FDs?
Yes! The interest is compounded every three months in the National Savings Time Deposit. This allows you to earn a slightly higher yield.
Can I book a 5-year TD and choose to pay interest at maturity?
No! In Post Office 5-year FDs, interest is paid out annually to your account. If you want cumulative growth with maturity payout, you can invest in NSC (National Savings Certificate) instead.
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Disclaimer:
This information is for general information purposes only. GoldenPi makes no guarantee on the accuracy of the data provided here; the information displayed is subject to change and is provided on an as-is basis. Nothing contained herein is intended to or shall be deemed to be investment advice, implied or otherwise. Investments in the securities market are subject to market risks. Read all the offer-related documents carefully before investing.
Fixed Deposit schemes are offered by Utkarsh Small Finance Bank, which is regulated by the Reserve Bank of India. GoldenPi Securities Private Limited is a registered debt broker and acts as a distributor and not as a manufacturer of the product.
