Did Post Office Time Deposit interest rates change in 2025?

On September 30, the Ministry of Finance announced the interest rates for Post Office Time Deposits (TD), or fixed deposits (FD), for October–December of FY 2025-26, keeping them unchanged for the quarter.

The Post Office offers time deposits in four tenures. The current rates are as follows:

• 1-year Post Office Time Deposit: 6.9%
• 2-year Post Office Time Deposit: 7%
• 3-year Post Office Time Deposit: 7.1%
• 5-year Post Office Time Deposit: 7.5%

Post Office Time Deposit interest rate in 2025

The Ministry of Finance announces the Post Office Time Deposit interest rates quarterly. "Interest shall be compounded on a quarterly basis and payable to the account holder at the end of each year during the period of deposit,” as per the National Savings Time Deposit Scheme, 2019.

The interest rate changes in the Post Office Time Deposit scheme are applicable only to new accounts opened during the quarter, and don’t impact the existing accounts.

The Finance Ministry hasn’t revised the Post Office Time Deposit interest rates since April 1, 2024, when it changed the rates for the 3-year tenure. In April 2024, the Finance Ministry increased the interest rate from 7.0% to 7.1% and kept the rates unchanged for the rest of the tenures.

This means that Post Office interest rates haven’t changed in 2025.

The interest rates offered on Post Office Time Deposits are better when compared to fixed deposits offered by major banks like the SBI or HDFC.

Most banks in India have reduced their interest rates multiple times in 2025, as the Reserve Bank of India (RBI) has cut the repo rate by 1% since February 2025.

When the RBI cuts the repo rate, borrowing becomes cheaper for banks, hence borrowing becomes cheaper for customers too. However, banks no longer need to offer a high interest rate on deposits, so FD interest rates fall as a result of a repo rate cut. This is why most banks have reduced their interest rates.

Post Office deposits are also safer, as they offer a sovereign guarantee on the entire deposit. Fixed deposits offered by banks, however, are secured by the RBI’s Deposit Insurance and Credit Guarantee Corporation (DICGC) only up to ₹5 lakh.