National Savings Time Deposits

About the scheme
Earlier known as Post Office Time Deposits, these accounts can only be opened at India Post branches. National Savings Time Deposits are available in 1-year, 2-year, 3-year and 5-year terms with different interest rates for each. The rates are reset by the Government at the beginning of each quarter. The current rate applies until December 31 2019.

Interest earned is taxable. It qualifies for section 80TTB exemption upto Rs 50,000 a year for senior citizens alone. The initial investment carries section 80C benefits upto Rs 1.5 lakh a year only for the 5-year National Savings Time Deposit. Deposits for 1, 2 and 3-year terms however do not fetch you 80C benefits.

Presently, the National Saving Time Deposits accept a minimum sum of Rs 1000 and multiples of Rs 100 thereafter. The interest rate is calculated quarterly but paid out once a year. There is no maximum limit to how much you can invest. Both single and joint accounts are allowed, with minors above 10 years of age allowed to open and operate this account.

The sums you invest in these time deposits are channelled into the National Small Savings Fund, which helps the Government of India meet its borrowing requirements every year. As these are Central government borrowings, they are sovereign-guaranteed. This actually makes National Savings Time Deposits safer than bank deposits, because banks offer deposit insurance cover only upto Rs 1 lakh per accountholder.
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