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Post Office Fixed Deposit Calculator

  • Deepak
  • Jan 12 2022
  • 5 minutes
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A Post Office fixed deposit is offered by the Indian Postal Services. It is one of the country’s oldest and most preferred investment avenues. A Post Office FD is similar to a bank fixed deposit in which an individual can invest money for a specific time period to avail a fixed interest earning. The longer the tenure, the higher the interest earnings.

Before investing in a post office FD, one can check the potential interest income from the investment by using Finity’s Post Office FD calculator. Here, we will explain the usage of this calculator while also highlighting some of the important details to know about post office FD investments.

What are the interest rates on post office FD?

An investor can invest in a post office fixed deposit for tenures ranging from 1, 2, 3 and 5 years. Currently, the post office FD interest rate is the same for tenures from 1 to 3 years and a higher rate can be earned for an investment period of 5 years. The interest on post office FD investment is payable annually and the minimum deposit amount is Rs.1,000 with no maximum limit.

Here is a look at the Post Office FD interest rates for different tenures.

Post office FD interest rates for different tenures:

1 Year – 5.5 %
2 Year – 5.5 %
3 Year – 5.5 %
5 Year – 6.7 %

What is the formula to calculate post office FD returns?

The maturity value of a post office FD investment can be estimated using the below-mentioned formula:

Maturity amount = Principal investment* (1+Interest rate/4) (n*4)

Principal = original investment amount
N = the tenure or number of years
Interest is compounded quarterly, and interest rate is the annual rate
Maturity value = total capital, including principal and interest earnings

Here’s an example to understand the calculations:

Suppose Nisha invested Rs. 1,00,000 in a post office FD for three years to earn an interest @6.7%

Using the formula given above, the maturity value can be calculated as:

Maturity Value = 100000*(1+0.067/4) (3*4)

Maturity Value = Rs. 1,22,059

The interest payment on post office FD is made annually. Therefore, during redemption, the maturity value will be paid to Nisha via a cheque.

How to use the Finity post office FD calculator?

Using the above-mentioned formula can be difficult for many investors since it is manual and time-consuming. This can be calculated with the help of Finity’s Post Office FD calculator.

Through this calculator, an investor can calculate the returns from his/her investment in a matter of a few seconds. Here is how to go about using the calculator:

  1. A user must first enter the invested amount, either manually or using the slider.
  2. The next step is to enter the expected returns in percentage form. This can be entered after checking the prevailing rates on post office FD investment.
  3. Lastly, one must select or enter the duration of investment, which is essentially the time period for which one wants to stay invested in the post office FD.
  4. Once all the above-mentioned details are entered, the post office FD calculator will show the total value and interest earned on the right-hand side in numeric and graph formats.

What are the benefits of using Finity’s post office FD calculator?

Some of the key benefits of using Finity’s FD calculator are:

  1. It is very easy to use
  2. It takes different aspects of a post office FD investment into consideration
  3. It helps in estimating:

    • the exact interest earnings at maturity,
    • the total maturity amount
  4. This calculator is free to be used multiple times for estimating returns
  5. The calculator is designed to do the calculations within a few seconds. This helps investors to save time and efforts
  6. With the help of this calculator, an investor can compare the investment across tenures and interest rate combinations to gauge the best option for maximum returns

Why invest in post office FD?

Here are some of the top features and benefits of a Post Office FD investment that explain why investors should consider investing in this:


  1. Nomination facility

    While opening an account for Post office FD investment, an investor can add nominees to his/her account. This allows rightful claims processing for the heir in case of the original investor’s demise.

  2. Minimum investment

    Opening a Post Office fixed deposit account requires a minimum amount of Rs.1,000 and there is no maximum limit attached. The scheme also allows a joint account to be opened by up to 3 adults.

  3. Attractive interest rates

    Compared to bank FDs, post office FDs offer attractive interest rates. This can especially be beneficial for senior citizens since they can avail higher rates.

  4. Taxation

    Investors can avail tax benefits applicable under Section 80C on investing in a 5-year Post Office FD. TDS is applicable on interest earnings from Post Office FD investment. This is, as per the investor’s applicable tax slab.

  5. Easy renewal

    An investor can easily renew a post office FD investment at maturity. For this, one must fill out a form or opt for the auto-renewal facility.

  6. Premature withdrawal

    An investor cannot prematurely withdraw a post office FD investment before completion of six months from the investment date. In case an FD is closed between 6 months to 1 year of investment date, the investor only earns savings account interest rate. If closed after completion of one year, a 2% penalty is applied on the interest earnings.


In India, many investors prefer to invest in a Post Office fixed deposit since it has the sovereign guarantee and is therefore considered safe. For investors who prefer to invest in a risk-free avenue and expect guaranteed returns, the Post Office FD can be an ideal choice.

Yes, the interest income from post office FD investment is taxable.

No, since post office FD pays annual interest, you cannot get a monthly income from the same. The interest is compounded quarterly and credited to your account annually.

Yes, both are the same. You can invest an amount of your choice for a fixed period to earn interest as per the ongoing rate. The minimum investment required is Rs. 1,000.

Post office FD is ideal for risk-averse investors who wish to earn guaranteed returns and are content with a slightly lower rate of return. Mutual funds, on the other hand, may involve some risk depending on the investment objective of the fund and is therefore meant for investors who have some risk appetite.

Post office FDs currently offer higher interest rates as compared to bank FDs and also come with sovereign backing to guarantee the returns. Bank FD returns, however, may carry some level of risk of default.

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