Current Post Office TD rates (October–December 2026)
| Tenure | Rate | Interest per year on ₹1 lakh | Total interest |
|---|---|---|---|
| 1 year | 6.9% | ₹7,081 | ₹7,081 |
| 2 years | 7.0% | ₹7,186 | ₹14,372 |
| 3 years | 7.1% | ₹7,291 | ₹21,874 |
| 5 years | 7.5% | ₹7,714 | ₹38,568 |
The rate you get on the day you deposit is fixed for the full tenure.
How Post Office TD interest works
Interest is compounded quarterly but paid out once a year, to your post office savings account. That is why ₹1 lakh at 7.5% earns ₹7,714 a year rather than ₹7,500 — the effective yield is about 7.71%. Your principal is returned at maturity.
Because interest is paid out annually, the deposit does not grow by itself the way a cumulative bank FD does. If you want the interest to compound, you can have it auto-transferred to a Post Office RD.
Post Office TD vs SBI FD
| Post Office TD | SBI FD | |
|---|---|---|
| 1 year | 6.9% | 6.25% |
| 5 years | 7.5% | 6.05% |
| Senior citizen extra | None | +0.50% to +1.00% |
| Safety | Government of India guarantee | DICGC insurance up to ₹5 lakh |
| Tenures | 1, 2, 3, 5 years only | 7 days to 10 years |
| Payout | Yearly | Monthly, quarterly or at maturity |
For general depositors, the post office currently pays clearly more. Senior citizens should compare carefully: SBI's 5-year WeCare rate is 7.05%, and the Senior Citizen Savings Scheme pays 8.2%. For SBI options, see the SBI FD calculator.
Rules worth knowing
- Minimum: ₹1,000, in multiples of ₹100. No maximum.
- Premature closure: not allowed in the first 6 months. Between 6 and 12 months, you get only the savings account rate. After a year, interest is recalculated at a lower rate (2% below the TD rate for the completed period).
- Joint accounts: up to three adults.
- Extension: at maturity, you can extend for the same tenure at the then-current rate.
Tax
Only the 5-year TD qualifies for the ₹1.5 lakh deduction under the old tax regime. Interest on all tenures is taxable at your slab rate, and TDS may be deducted above the annual limit if you do not submit Form 15G/15H.