Post Office Saving Schemes

For individuals seeking dependable avenues for financial growth, Post Office Saving Schemes present a compelling option. Guaranteed by the government of India, these schemes offer competitive interest rates and a diverse range of investment plans. Catering to various financial goals, from retirement planning to educational expenses, Post Office Saving Schemes provide a secure and accessible way to accumulate wealth.

The interest rates for post office deposit schemes are set by the government of India. These rates are reviewed periodically and are subject to change from time to time. Here’s a quick look at the different savings plans offered by India Post and the current rate of interest for each of them. 

Note: The interest rates mentioned above are valid as of March 2024 and are subject to change from time to time. 

• This is very similar to the savings account that you hold with a bank. 

• The Post Office Savings Account rate of interest is 4% per annum. This interest is fully taxable; however, TDS on the interest will not be deducted. 

• There’s a minimum balance that you would have to maintain to keep your post office savings account active. In the case of an account with no chequebook facility, the minimum balance requirement is ₹50. On the other hand, for an account with the chequebook facility, the minimum balance requirement is ₹500. 

• The interest that you earn from this post office scheme is eligible for deduction of up to ₹10,000 per financial year under section 80TTA of the Income Tax Act, 1961.

• The post office recurring deposit plan comes with a fixed tenor of 5 years, with the interest being compounded every quarter. 

• You can invest as low as just ₹100 per month, making this one of the best postal saving schemes currently available.

• A penalty of ₹1 for every ₹100 will be levied in the case of missed payments. 

• Up to 50% of the balance in the RD account can be partially withdrawn after 1 year from the date of account opening. 

• The post office time deposit plan is very similar to a bank fixed deposit. The tenor ranges from 1 year to 5 years. 

• The minimum amount of investment that you can make in this avenue is ₹1,000. There’s no cap on the maximum amount that you can invest.

• The post office time deposit can be pledged as collateral to acquire loans from financial institutions. It is important to know the returns that you will receive when you invest. Therefore, you can make use of the fixed deposit interest rates calculator that is available on Bajaj Markets.

•  The Monthly Income Scheme is one of the few post office investment schemes that are designed to offer a steady stream of income each month. 

• The minimum amount that you can invest is ₹1,000, whereas the maximum amount is ₹4.5 Lakhs in the case of a single account and ₹9 Lakhs in the case of a joint account. 

• The tenor of the scheme is 5 years and the account can be transferred from one post office branch to another. 

•  The post office senior citizens savings scheme is exclusively for individuals above 60 years of age. Retired individuals from the defence sector, aged above 50 years, can also invest in the scheme. 

• The interest from this investment scheme is paid out every quarter. 

• The minimum amount of investment is ₹1,000, whereas the maximum amount is ₹15 Lakhs. 

• Premature withdrawal is possible. 

• However, a small penalty will be levied based on when you withdraw. 

• One of the best post office saving plans that individuals including minors can invest in, PPF has a low minimum investment amount of just ₹500. The maximum amount that you can invest in a year is ₹1.5 Lakhs. 

• PPF has a lock-in period of 15 years, after which, the funds can either be withdrawn or the tenor be extended by blocks of 5 years. 

• The interest earned on PPF investments is tax-free. To get to know how much interest your investment is likely to earn, you can use a PPF calculator. 

• The contributions made to the account are eligible for deductions under section 80C of the Income Tax Act, 1961 to the tune of ₹1.5 Lakhs in a financial year. 

• The National Savings Certificate is a post office scheme with a tenor of 5 years. 

• The minimum amount of investment in the plan is ₹1,000, with no maximum limit on the investment. 

• You can claim the amount invested in NSC as deductions under section 80C of the Income Tax Act, 1961 to the tune of ₹1.5 Lakhs in a financial year. 

• The NSC can also be pledged as collateral to avail loans from financial institutions.

• Kisan Vikas Patra doesn’t have a fixed tenor. Instead, the deposit will mature on the date prescribed by the Ministry of Finance at the time of opening the account.

• The amount invested in KVP will double in 123 months. The current KVP interest rate is 7.5% per annum. 

• As with other post office savings schemes, the minimum amount of investment is ₹1,000, with no cap on the maximum amount of investment. 

• Designed for girl children below 10 years of age, the Sukanya Samriddhi Account offers a high rate of interest. 

• The minimum amount of investment is ₹250, with the maximum limit set at ₹1.5 Lakhs per financial year. 

• The amount received by the girl child upon maturity is completely tax-free and the contributions made to an SSA are eligible for section 80C deductions to the tune of ₹1.5 Lakhs per financial year.

The Post Office Saving Schemes are not available on Bajaj Markets. You can apply for a Savings Scheme at the Post Office through online and offline means. Here’s how it works:

Online Method

1. Place a request for mobile and internet banking at the Post Office
2. Go to the official e-banking website
3. Use the activation code sent to you within 48 hours of account opening
4. Navigate to the ‘New User Activation’ option

There, you will be able to access the following facilities:

• Opening a Recurring Deposit or Fixed Deposit

• Deposit funds into your PPF/SB/SSA/RD account

• Withdraw from your PPF

• Acquire an RD Loan

• Repay your RD Loan or PPF Loan

• View transactions

• Get a mini-statement

• Nominate an individual

• Transfer accounts

• Make a death claim

Offline

1. Visit your nearest post office branch

2. Carry all the required documents with you

3. Complete the form provided to you at the post office

4. Submit the documents and the form

Here’s a list of the documents required to apply for a Post Office Savings Scheme:

• KYC Form

• Aadhaar Card

• PAN Card

• Passport

• Voter ID Card

• Birth certificate

• Driving licence

Note: Additional documents could be requested depending on the scheme that you choose. Please enquire about this beforehand to avoid any inconvenience.

There are many points of difference between post office savings schemes and other savings schemes offered by financial institutions. Here’s a quick look at a few of them.

• The interest rates offered by India Post tend to be around 4% per annum to 7.6% per annum. The interest rates on other savings schemes like bank FDs and RDs range from 4% per annum to 8% per annum.  

• All postal savings schemes are guaranteed by the government of India and are therefore risk-free. However, other savings schemes may not be entirely risk-free and tend to carry a certain amount of risk. 

• Many post office savings schemes offer tax benefits in the form of deductions under section 80C; the interest payments on some of them are also tax-free. In the case of other savings schemes, you will not only have to pay tax on the interest but also be ineligible for tax benefits. 

• The Monthly Income Scheme (MIS) and Senior Citizens Savings Scheme (SCSS) are designed to offer you a steady source of income. Other savings schemes may not offer this feature. 

Here’s the table with taxability details on different saving schemes by the Post Office:

India Post has prescribed a schedule of fees that are applicable for all post office saving schemes. Check out the table below to get an idea of the fees and charges. 

Note: All of the amounts prescribed in the above table are exclusive of GST.