# ₹10 lakh in 3-year vs 5-year Post Office TD: interest compared

2026-09-27T13:01:33+00:00 | Governance | Indian Opinion Desk

Corroboration: 1 independent outlet

A ₹10 lakh investment in a Post Office Time Deposit (National Savings Time Deposit) will earn different interest depending on the tenure chosen. For the July-September 2026 quarter, the government has kept the rate at 7.1% per annum for 3-year deposits and 7.5% per annum for 5-year deposits. On a ₹10 lakh deposit, the 3-year TD would generate approximately ₹2.13 lakh in total interest over three years, while the 5-year TD would generate about ₹3.75 lakh in interest over five years. The 5-year option thus yields roughly ₹1.62 lakh more in interest, though the money stays invested for two extra years. The 5-year TD also qualifies for a Section 80C tax deduction, subject to income-tax rules. Interest earned is taxable under the investor’s slab. Investors should check the prevailing rate before opening a deposit, as the Ministry of Finance reviews small-savings rates quarterly.

## Indian Opinion Analysis

The 5-year Post Office TD's 0.4 percentage-point rate advantage may look small, but it compounds over a longer lock-in, producing a meaningful rupee difference. For conservative investors, the key trade-off is liquidity: the 3-year option frees funds sooner but yields less, while the 5-year option offers a higher return plus a tax deduction under Section 80C, though early withdrawal penalties apply. The Ministry of Finance's quarterly rate review means the current spread could narrow or widen next quarter, so investors locking in now must accept that future rate changes do not affect an existing deposit. The real choice depends on whether the investor needs the principal in three years or can wait five. The Ministry of Finance's next quarterly review for small-savings rates will set rates for the October-December 2026 quarter.

## Coverage

- livemint.com <https://www.livemint.com/money/personal-finance/10-lakh-in-3-year-post-office-td-vs-5-year-td-which-earns-more-interest-check-out-the-calculations-11790496574077.html>

Tags: Ministry of Finance, National Savings Time Deposit, Post Office Time Deposit, Section 80C
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