National Savings Time Deposit Compare

Additional Useful Information

• The minimum amount required to invest in the National Savings Time Deposit Account is ₹1000 and multiples of ₹10

• There is no maximum limit as to how much an investor can invest in this scheme.

• The National Savings Time Deposit Account scheme offers 4 maturity periods – 1 Year, 2 Years, 3 Years and 5 Years.

• Withdrawal of funds are permissible, but only after 6 months of the investment date.

• National Savings Time Deposit is suitable for investors with a low-risk appetite and those who want regular income with negligible risk.

• Interest earned in this scheme is paid out annually but calculated at the end of each quarter.

Returns *

• National Savings Time Deposit Account scheme guarantees returns.

• There is only one component of return in this scheme. This is the interest payment made at the end of each financial year.

• In contrast to other traditional debt instruments, this investment mode offers lower returns.

• Currently, for 1 year is 6.9%, for 2 year is 7%, for 3 year is 7.1% and for 5 year is 7.5% interest can be earned in this mode of investment depending upon the maturity period.

Risk Level

• National Savings Time Deposit Account scheme is a low-risk investment option since it is backed by the government of India.

• This means that deposits in a National Savings Time Deposit Account are safe and secure since the government can never default.

Liquidity

• National Savings Time Deposit Account scheme is a relatively illiquid investment option initially since investors cannot withdraw funds from this scheme before a minimum period of 6 months.

• However, after completing 6 months, premature withdrawal as well as redemption can be done at any time. This makes this scheme liquid after 6 months.

Interesting Facts

• Interest rates increase with longer maturities. A 5-year time deposit offers a higher interest rate as compared to a 1, 2 or a 3-year time deposit.

• On maturity, the investor has an option of extending the National Savings Time Deposit Account for another tenure. This tenure is the same for which the Time Deposit Account was initially opened.

Tax Implications

• This scheme is taxable. Taxes are levied based on the interest collected.

• Any Interest that investors receive is added to their taxable income and they need to pay tax according to their income slab.

• There is no capital gains tax applicable.

• Investors investing in the national savings time deposit can claim an amount for tax deduction of up to ₹1,50,000 under Section 80C of the Income Tax Act.

• It is to be noted that the Section 80C deduction is only available for investments with a maturity of 5 years.

• In addition, investors can also claim a deduction of up to ₹50,000 under Section 80TTB of the Income Tax. The deduction is available for senior citizens aged 60 years or above.

Where To Invest

• https://www.indiapost.gov.in/Financial/Pages/Content/Post-Office-Saving-Schemes.aspx