The Post Office provides different types of savings plans, and one of them is the Post Office FD Scheme or Time Deposit Scheme.
Recently, there have been important changes to the FD scheme rules, as announced by the Finance Ministry on November 7, 2023.
If you’re considering investing in the Post Office time deposit or FD scheme, here’s some information about the updated rules.
Changes in Premature Withdrawal Rules for Post Office FD Scheme
According to the Finance Ministry’s notification, starting from November 10, 2023, you can no longer withdraw your money prematurely from the five-year FD scheme before completing four years.
In other words, premature withdrawal for a 5-year Post Office FD can now only be done after 4 years.
If you invest in the FD scheme for one, two, or three years and withdraw within 6 months to 1 year, you’ll receive interest at the same rate as the post office savings account, which is lower.
For two- and three-year FD schemes, withdrawing money after 1 year will result in a 2% lower interest rate than the fixed FD interest rate.
If you choose a five-year FD scheme, you’ll receive interest as per the post office savings account rate between four and five years.
Old Withdrawal Rules for Post Office
It’s important to note that the old rules apply to post office FD accounts opened before November 10, 2023.
For accounts opened until November 9, there is no withdrawal facility for the first six months.
According to the old rules, no withdrawals are allowed within the first six months of investment.
After six months but before completing one, two, three, or five years, premature withdrawal will only yield interest at the savings account rate for the month of the deposit.
However, if you make a premature withdrawal after four years in a five-year FD scheme, you’ll receive the benefit of a three-year FD scheme.
