Post office schemes act as a safe investment option that provides tax benefits and high-interest rates. The most lucrative feature of these schemes is that they are supported by the sovereign guarantee of the Government of India. In this blog, we have explained the different schemes and their interest rates and benefits.
Table of contents
- Savings Schemes Under Post Office Investments
- Post Office Fixed Deposit Scheme
- Post Office Senior Citizen Saving Scheme
- Post Office Monthly Income Scheme (MIS)
- Post Office Time Deposit Scheme
- 5 Years Fixed Deposit Interest Rates in Post Office
- 1 Year Fixed Deposit Interest Rates in Post Office
- Post Office 15 Years Scheme
- Post Office National Savings Certificates
- Advantages of Investing in Post Office Saving Scheme
- Kisan Vikas Patra Fixed Deposit
- Post Office Savings Schemes Comparison
- How to Open a Post Office Saving Schemes Account?
- How to Open a Recurring Deposit or Term Deposit Account Through Mobile?
- Post Office Scheme Schedule Fee
- FAQ’s about Post Office Saving Scheme
Savings Schemes Under Post Office Investments
The post office saving schemes include many reliable and genuine products that offer risk-free returns on your investments. These schemes are operated by nearly 1.54 lakh post offices spread across the country. For instance, the government operates the PPF scheme with the help of 8200 post offices and public sector banks in every city.
The Post Office Saving Schemes are:
- Post Office Savings Account (SB)
- National Savings Recurring Deposit Account (RD)
- National Savings Time Deposit Account (TD)
- National Savings Monthly Income Account (MIS)
- Senior Citizens Savings Scheme Account (SCSS)
- Public Provident Fund Account (PPF)
- Sukanya Samriddhi Account (SSA)
- National Savings Certificates (VIIIth Issue) (NSC)
- Kisan Vikas Patra (KVP)
Post Office Fixed Deposit Scheme
The Indian Government’s Department of Posts provides fixed deposit accounts which offer high-interest rates on the tenure ranging from 1 to 5 years. A minimum of ₹1,000 has to be deposited, and there is no maximum amount. The interest rate is payable annually. The account can be opened by cash or cheque. Premature withdrawal of a Post Office FD can be made between 6 months and one year.
| Deposit Tenure | Post Office FD rates (Per Annum) |
| 1 Year | 5.50% |
| 2 Years | 5.50% |
| 3 Years | 5.50% |
| 5 Years | 6.70% |
Post Office Senior Citizen Saving Scheme
This government scheme is also known as the retirement scheme, which allows you to make a lump sum deposit in one instalment. An interest rate of 7.4% is offered on the deposit ranging from ₹1,000 up to ₹15 lakh. Only individuals above the age of 60 are eligible to initiate the account. Retired civilian employees aged 55 to 60 and retired defence employees between 50 to 60 years can also get this account opened. The account can be opened subject to the investment of retirement benefits within one month from the date of the benefits.
Post Office Monthly Income Scheme (MIS)
In a monthly income scheme, you can deposit an amount of ₹1,000 up to ₹4.5 lakh in a single account and up to ₹9 lakh in a joint account. This account provides you with an interest rate of 6.6% per annum, along with a monthly fixed income. Premature closure of the account (before one year) is not allowed, and closures after one year might be charged with penalties.
Post Office Time Deposit Scheme
The post office time deposit account provides 4 possible tenures, i.e. 1, 2, 3, and 5 years. The account requires a minimum deposit of ₹1,000. The interest on this scheme is calculated quarterly but is payable annually. 5.5% p.a interest is provided for a tenure of up to 3 years, and 6.7% p.a. is provided for 5 years.
5 Years Fixed Deposit Interest Rates in Post Office
The FD interest rate in the post office for 5 years is 6.70%.
1 Year Fixed Deposit Interest Rates in Post Office
The FD interest rate in the post office for 1 year is 5.50%.
Post Office 15 Years Scheme
Many individuals prefer the Public Provident Fund as a retirement and investment tool. The scheme also provides income tax deductions of up to ₹1.5 lakh every financial year under Section 80C. A minimum deposit amount of ₹500 is required to open the account, and the upper limit is ₹1.5 lakh. The PPF Scheme provides an interest rate of 7.1% per annum, compounded annually. The interest earned is tax-free.
Post Office National Savings Certificates
National Savings Certificates have a maturity period of 5 years. The interest rate provided by the scheme is 6.8% yearly which compounds in half-year but is payable on maturity. This scheme initiated by the Government of India is a savings bond that encourages investments from small to mid investors while also saving on tax.
Advantages of Investing in Post Office Saving Scheme
Easy Investment Process
It is very easy to enrol in post office saving schemes as it requires very limited documentation. The simple procedures are a testament that these schemes are safe investments and offer a fixed return as the government sponsors them.
Easy Accessibility
Both rural and urban investors can enrol under the scheme as post offices are available in every corner of the country. Hence, both can benefit from the simple procedures of the scheme.
Long Term Benefits
The post office schemes are future-oriented and beneficial in the long run as they are a form of secure pension or retirement plan; also, the investment period can extend up to 15 years for a PPF account.
Competitive Interest Rate
The interest rates for post office saving schemes vary from 4% to 8%, which is highly competitive and risk-free.
Risk-free because the Government of India regulates them.
Customised Products for Investors
A wide variety of products are available that cater to investors’ different grades. The products vary according to the investor’s requirements, tax implications, expected return, and investment horizons.
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Kisan Vikas Patra Fixed Deposit
This scheme allows you to double the amount invested over the entire tenure. You have to deposit a minimum amount of ₹1,000 in this account. As of 2020-21, the interest rate for this scheme is 6.9%. The tenure of this scheme is 124 months. The account’s tenure is subject to variation in interest rate.
Post Office Savings Schemes Comparison
| Scheme | Interest Rate | Minimum Investment | Maximum Investment | Eligibility | Tax Implications |
| Post Office Savings Account | 4% per annum (p.a.) | ₹20 and ₹50 (non-cheque facility) | No limit | Resident Indians, both major and minor | Interest with no tax up to ₹50,000 from the 2018-19 financial year. |
| Post Office Time Deposit Account (TD) | 1st year – 5.5% p.a.2nd year – 5.5% p.a.3rd Year – 5.5% p.a.4th Year – 6.7% p.a. | Rs 200 | No limit | Individual | Tax benefits for up to 5 years on deposits (under Section 80C ) |
| Post Office Monthly Income Scheme Account (MIS) | 6.6% per annum payable monthly | Rs 1,500 | For 1 account holder – ₹4.5 lakhJoint account holders – Rs 9 lakh | Individual | Taxable interest, no deduction on the deposits made under Sec 80C. |
| Senior Citizen Savings Scheme (SCSS) | 7.4% p.a. (Compounded annually) | Rs 1,000 | Maximum deposit of ₹15 lakh is allowed over a lifetime | Individuals more than 60 years or more than 55 years of age who have chosen superannuation or VRS | – Tax benefit on deposits as per Section 80C – TDS to be levied on interest earned for more than Rs 50,000 p.a. |
| 15-year Public Provident Fund Account (PPF) | 7.1% p.a. (Compounded annually) | Rs 500 per financial year | Rs 1.5 lakh per financial year | Individual | Tax rebate on deposits as per Section 80C (maximum ₹1.5 lakh per annum) |
| National Savings Certificates (NSC) | 6.8% p.a. (Compounded annually) | Rs 100 | No limit | Individual | Tax rebate on deposits as per Section 80C (maximum ₹1.5 lakh per annum) |
| Kisan Vikas Patra (KVP) | 6.9% p.a. (Compounded annually) | Rs 1,000 | No limit | Individual (Adult) | Interest has to be taxed, but no tax will be levied on the maturity amount. |
| Sukanya Samriddhi Accounts | 7.6% p.a. (Compounded annually) | ₹1,000 per financial year | ₹1.5 lakh per financial year | Girl child – up to 10 years after birth and 1 additional grace year | Investment (up to ₹1.5 lakh is exempted under Section 80C), interest and the maturity amount received is tax-free. |
How to Open a Post Office Saving Schemes Account?
Step 1: Head to the India Post’s official website or a post office near you to acquire the application form.
Step 2: Fill out the form with the correct details.
Step 3: Assemble the required documents and one passport size photograph.
Step 4: Pay a deposit amount that cannot be less than ₹20.
Step 5: If you do not need a cheque book, you will have to open a post office savings account with a deposit amount of ₹50.
How to Open a Recurring Deposit or Term Deposit Account Through Mobile?
Step 1: Download the India Post Mobile Banking app on your mobile phone and log into the app.
Step 2: After you have successfully logged in, choose the ‘Requests’ tab visible on the home screen to open a POFD account.
Step 3: Fill in the required details like tenure, deposit amount, nominee, the account from which money must be deposited, and other details to open the account.
In order to open an account for any other post office savings scheme, you will have to visit the post office of the home branch.
Post Office Scheme Schedule Fee
| Duplicate Passbook Issue | Rs. 50 |
| Deposit Receipt or Issue of Statement of Account | Rs. 20/case |
| Issue of Passbook in Lieu of Lost or Mutilated Certificate | Rs. 10 per registration |
| Cancellation or Change of Nomination Charges | Rs. 50 |
| Account Transfer Fee | Rs. 100 |
| Pledging of Account | Rs. 100 |
| Issue of Cheque Book (for Savings Bank a/c) |
|
| Cheque Dishonour Charges | Rs. 100 |
FAQ’s about Post Office Saving Scheme:-
Q1. Which is the best post office saving scheme?
Sukanya Samriddhi Accounts is one of the best post office saving schemes.
Q2. What is the interest of ₹1 lakh in the post office?
The post office will provide an interest of 7.7% for a sum of ₹1 lakh.
Q3. Can I double my money or investment in 5 years?
No, you cannot double your money through post office schemes within 5 years. The post office interest rates are lower, and hence it will take you a long time to increase your savings.
Q4. Is NSC better than KVP?
KVP is preferable if you want to invest in an assured option that offers lower risk and provides double the maturity amount. NSC requires a 5-year lock-in period, whereas the lock-in period for KVP is 2.5 years.
Q5. What is the current NSC interest rate?
The current interest rate for National Savings Certificates is 6.8%.
Q6. What is the interest rate of MIS in the post office?
The latest post office Monthly Income Scheme interest rate is 6.6%.
Q7. What is the interest rate for senior citizens in the post office?
The interest rates are different for various schemes for senior citizens in the post office. The interest rate for Senior Citizen Savings Scheme (SCSS) is 7.40%.
Q8. Can I start a post office savings account online?
Yes, you can open a post office savings account online by visiting the official website of India Post.
Q9. Which post office scheme is best for investment?
Many salaried individuals prefer a 15-years Public Provident Fund Account (PPF) as the scheme allows a deduction of ₹1.5 lakh income tax under Section 80C.
