Post Office Fixed Deposit/Time Deposit Interest Rate July-September 2023: The Post Office Fixed Deposit interest rates for the July-September quarter of FY 2023-24 were announced today (June 30). The Finance Ministry has increased the interest rate for 1-year FD in Post Office while keeping the rates for other tenors unchanged.
Post Office Fixed Deposit account holders were hoping for a further hike in the interest rate. However, another hike was less likely as the Post Office Fixed Deposit interest rates for various tenors were increased by up to 0.5% in the last quarter.
In the April-June quarter of FY 2023-24, the Post Office Fixed Deposit interest rate was increased up to 7.5% (check rates below for the April-June and July-September quarters).
The Post Office Time Deposit allows investors to deposit any amount. The minimum amount is Rs 1000 and thereafter in multiples of Rs 100. Deposits up to Rs Rs 1.5 lakh per year in 5-year Post Office Fixed Deposit qualify for tax deduction under Section 80C of the Income Tax Act. The interest earned from Post Office Fixed Deposit deposits is not tax-free.
Post Office Time Deposit Interest Rates July-September 2023
| Period | Rate |
|---|---|
| 1yr.A/c | 6.9% |
| 2yr.A/c | 7% |
| 3yr.A/c | 7% |
| 5yr.A/c | 7.5 % |
Post Office Time Deposit Interest Rates Aprl-June 2023
| Period | Rate |
|---|---|
| 1yr.A/c | 6.8% |
| 2yr.A/c | 6.9% |
| 3yr.A/c | 7% |
| 5yr.A/c | 7.5 % |
In the last six months, the Government has increased interest rates for small savings schemes like Senior Citizen Savings Scheme (SCSS), National Savings Certificate (NSC), Sukanya Samriddhi Yojana (SSY) account, Kisan Vikas Patra (KVP), and Post Office deposit schemes like Post Office Time Deposit, Post Office Monthly Income Scheme (POMIS) and Post Office Recurring Deposit (RD). The only scheme for which the interest rate has not been changed is Public Provident Fund (PPF).
Since the Reserve Bank of India (RBI) has paused the repo rate hike, after increasing it by 2.5% since May 2022, there was very little possibility of a further hike in the Post Office Fixed Deposit account interest rate today.
The interest rates of small savings schemes, including Post Office Fixed Deposits, are linked to yields of Government Securities (G-Secs). The Finance Ministry reviews the interest rates of small savings schemes like Post Office Fixed Deposits every quarter of a financial year. The review is done on the basis G-Secs yields of the previous three months.
The interest rates offered by the Government on most of the small savings schemes, including Post Office Fixed Deposit, are already at par with term deposits offered by banks. Therefore, the chances of a further increase in Post Office Fixed Deposit interest rates were very low. Moreover, in view of RBI’s repo rate hike pause and falling inflation, experts believed there was not much room for an upward revision of the Post Office Fixed Deposit interest rates.