How to interpret your result
The Maturity Value compounds quarterly, matching how Post Office Time Deposits (POTD) actually credit interest — check that the tenure you selected matches the current published rate for that tenure (1yr, 2yr, 3yr, and 5yr each carry a different rate, revised quarterly by the government).
Only the 5-year POTD is Section 80C-eligible — the 1, 2, and 3-year tenures carry no tax deduction on the deposit, though all tenures' interest is fully taxable at your slab rate regardless of the deduction status.
POTD carries a sovereign guarantee, unlike a bank FD (which is insured only up to ₹5 lakh under DICGC) — that's the main reason to choose it over a similarly-rated bank FD, not the maturity value alone, since the two often land close to each other in absolute returns.
Post Office Time Deposit: the forgotten safe alternative to bank FDs
While bank FDs get most of the attention, the Post Office Time Deposit (POTD) often offers higher rates, a full government guarantee (no ₹5L cap), and the same tax benefits. Yet most investors overlook it simply because it's less marketed.
Current POTD rates vs. major bank FD rates (2025)
| Tenure | Post Office | SBI | HDFC Bank | ICICI Bank |
|---|---|---|---|---|
| 1 year | 6.9% | 6.8% | 7.1% | 7.25% |
| 2 years | 7.0% | 7.0% | 7.4% | 7.25% |
| 3 years | 7.1% | 6.75% | 7.4% | 7.0% |
| 5 years | 7.5% | 6.5% | 7.35% | 7.0% |
Senior citizens get an additional 0.5% from banks but not from Post Office (though SCSS at 8.2% is available separately for seniors).
Why Post Office FD over bank FD?
- Full government guarantee — no ₹5L DICGC cap
- Higher 5-year rate — 7.5% vs. 6.5–7.35% at most banks for 5-year FD
- 80C benefit on 5-year TD — same as tax-saving bank FD
- Available pan-India — 1.5 lakh+ post offices vs. limited bank branch reach
For 1–3 year tenures, private banks like HDFC/ICICI edge ahead — but for 5-year tenure, Post Office remains competitive.