In any most of investment it is suggested to wait till your investment gets matures. But depending on circumstances we took decisions whether to retain invested, or withdraw amount.

In case of Post office's Time Deposit Account premature withdrawal is possible but only after six months from the date of deposit.

But some conditions apply here. You will get only amount invested at time of your withdrawal. Interest earned on that amount can only be get after full maturity amount.

let's take an example to understand this. Mr.X has opened 1 lac rupees time deposit account for 3 year on 1-april-2016. After 1 year (1-april-2017) he needed some money and wishes to withdraw all money from this account. First of all Mr.X is eligible to prematurely withdraw money as six month has been past. At a time of withdraw(1-april-2017) he'll get full 1 lac rupees which he invested. But interest which is earned for 1 year, can only be get after full maturity which will be 1-april-2019.

Another twist on interest being paid for premature-withdrawal

For accounts opened before 1-Dec-2011

  • No interest is paid if deposit is withdrawn within one year.
  • For Deposits withdrawn after one year, 2% lower rate is paid then specified rate.

For accounts opened on or after 1-Dec-2011

  • No interest is paid if deposit is withdrawn within six month.
  • If withdrawn between six month to 1 year then simple interest at the rate of post office savings account (whichever is applied at that time) shall be payable.
  • In case of deposit withdrawn after 1 year, payable interest rate is 1% less than specified interest rate.

I hope this article will clear all doubts related to premature withdrawal for time deposit accounts. Thank you.