Top 10 Best Post Office Saving Schemes In India

Post office saving schemes are a good way to make risk-free investments. There are around 1.54 lakh post offices in India that operate these investment schemes. These investments offer a high rate of interest and also provide tax benefits under Section 80C. On top of it, they have the sovereign guarantee of the Indian Government. 

As the post office investment schemes are backed by the government, they offer guaranteed returns and there are no chances of incurring losses. 

List of Top Post Office Saving Schemes Interest Rates for 2024

1. Post Office Savings Account

Eligibility:

• Who can open an account?
  • A single adult resident of India
  • Two adults jointly (Joint A or Joint B)
  • A guardian on behalf of a minor above 10 years old
  • A guardian needed on behalf of a person of unsound mind
  • A minor above 10 years old can open in their own name

Important points to note:

• One person can only have one single account across all post offices in India.
• Minors and people of unsound mind can only have one account each (in their own name or through a guardian).
• Upon the death of a joint account holder, the surviving holder becomes the sole owner. If the survivor already has a single account, the joint account must be closed.
• You cannot convert a single account to a joint account or vice versa.
• Nominating a beneficiary is mandatory when opening the account.
• Minors who turn 18 must submit a new account opening form and KYC documents to convert the account to their own name.

Deposits and Withdrawals:

• All deposits and withdrawals must be in whole rupees.
• Minimum deposit: Rs. 500 (subsequent deposits can be as low as Rs. 10)
• Minimum withdrawal: Rs. 50
• Maximum deposit: No upper limit
• You cannot withdraw funds if it reduces the balance below Rs. 500.
• If the account balance doesn't reach Rs. 500 by the financial year-end, a Rs. 50 maintenance fee will be deducted. A zero balance will lead to automatic account closure.

Interest:

• Interest is calculated on the minimum balance between the 10th and the end of each month, rounded to the nearest whole rupee.
• No interest is earned in a month if the balance falls below Rs. 500 between the 10th and last day.
• Interest is credited to your account annually at the rate set by the Ministry of Finance.
• You earn interest up to the month preceding account closure.
• According to Section 80TTA of the Income Tax Act, interest up to Rs. 10,000 per financial year earned on savings accounts is exempt from tax.

Silent Accounts:

• An account with no deposits or withdrawals for three consecutive financial years is considered inactive or dormant.
• You can close such accounts by giving an application with fresh KYC documents and your passbook at the post office.

Additional Facilities:

These facilities require downloading and submitting a form at your local post office:

• Cheque book
• ATM card
• Internet banking/mobile banking
• Aadhaar seeding (linking your Aadhaar card)
• Atal Pension Yojana (APY) - government pension scheme
• Pradhan Mantri Suraksha Bima Yojana - life insurance scheme
• Pradhan Mantri Jeevan Jyoti Bima Yojana - life insurance scheme

2. Post Office Monthly Income Scheme

• Interest rate: The post office monthly income scheme currently offers 7.4% per annum (as of April 2024), payable monthly. The interest rate is revised quarterly.
• Investment period: Fixed at 5 years.
• Minimum investment: ₹1,000 with subsequent deposits in multiples of ₹1,000.
• Maximum investment: ₹9 lakh for a single account and ₹15 lakh for a joint account.
• Account holder: Can be opened by a resident Indian adult (singly or jointly) or a minor above 10 years old (with a guardian).
• Maturity: The invested amount is returned at the end of the 5-year term along with accrued interest.
• Taxation: Interest earned is taxable as per your income tax slab.
• Security: Backed by the Government of India, ensuring high safety for your investment.

3. Kisan Vikas Patra (KVP)

• Investment type: KVP is a certificate-based scheme, where you invest a lump sum amount for a fixed maturity period.
• Investment period: Currently, the maturity period is 115 months (approximately 9.5 years).
• Minimum investment: ₹1,000 and in multiples of ₹100 thereafter. There's no maximum limit.
• Returns: KVP offers an attractive interest rate, currently set at 7.5% p.a. (as of April 1, 2024). The interest is compounded annually and the maturity amount is designed to double your investment.
• Account type: KVP can be purchased by a single adult (for themselves or a minor), two adults jointly (with different payout options), or even a minor above 10 years old.
• Tax benefits: Unlike some investment options, KVP doesn't offer tax deduction benefits under Section 80C. However, the interest earned will be taxable according to your income tax slab.
• Liquidity: KVP has a lock-in period of 2.5 years. Premature encashment is generally not allowed except in special cases like death of the holder or forfeiture by a government official.

4. Sukanya Samriddhi Yojana

• Eligibility: Only a girl child below 10 years of age can have an SSY account opened in her name by her parent or legal guardian. A family can open up to two SSY accounts, one for each girl child.
• Investment period: The account has a maturity period of 21 years from the date of account opening. However, it matures earlier if the girl child gets married after she turns 18.
• Minimum and Maximum deposit: A minimum of ₹250 needs to be deposited every financial year to keep the account active. The maximum deposit allowed in a year is ₹1.5 lakh.
• Interest rate: Currently, SSY offers a competitive interest rate of 8.2% per annum (as of April 1, 2024). The interest is compounded annually.
• Tax benefits: Deposits made towards SSY qualify for tax deduction under Section 80C of the Income Tax Act, up to a maximum of ₹1.5 lakh per year. Also, the interest that you earn and the maturity amount credited are tax-free.
• Account opening: SSY accounts can be opened at authorized branches of public sector banks, some private sector banks, and all India Post offices.
• Account closure: Premature closure is generally not allowed except for special cases like medical exigencies of the girl child or her demise.

5. National Savings Certificate

• Investment type: Similar to Kisan Vikas Patra, NSC is a certificate-based scheme where you invest a lump sum amount for a fixed maturity period.
• Investment period: This scheme comes with a lock-in period of 5 years. Premature encashment is generally not allowed.
• Minimum and Maximum investment: You can invest a minimum of ₹1,000 and in multiples of ₹100 thereafter. There's no upper limit on investment.
• Returns: NSC offers a fixed interest rate that is currently set at 7.7% per annum (as of April 1, 2024). The interest is compounded annually.
• Account type: NSC can be purchased by a single adult (for themselves or a minor), two adults jointly (with different payout options), or even a minor above 10 years old.
• Tax benefits: Investments in NSC qualify for tax deduction under Section 80C of the Income Tax Act, up to a maximum of ₹1.5 lakh per financial year. 
• Liquidity: Unlike some other investment options, NSC has limited liquidity due to the lock-in period.

Secure Investments: Top 5 Post Office Schemes in India

India's post office saving schemes offer secure avenues for investment, backed by government assurance and tax benefits. With options like the Post Office Savings Account, Monthly Income Scheme, Kisan Vikas Patra, Sukanya Samriddhi Yojana, and National Savings Certificate, you can enjoy attractive interest rates and flexibility to meet your financial goals. These schemes provide stability, security, and tax advantages, making them optimal choices for individuals looking to grow their wealth while minimizing risk.

FAQs on Best Post Office Schemes

1. Which post office scheme gives the highest return?

The National Savings Certificate, Sukanya Samriddhi Yojana, and Senior Citizens Savings Scheme are some of the post office schemes that provide the highest returns.

2. Can I withdraw money from any post office?

Yes, you can withdraw money from any office whenever you require. However, a minimum balance of INR 500 needs to be maintained.

3. Is Post Office investment safe and tax-free?

You can invest in Post Office schemes with confidence because they are guaranteed by the Indian government. Plus, you can get tax breaks on your contributions up to a certain amount.

4. Can students open a post office savings Scheme?

Most Post Office savings schemes are open to students over 18. The only exceptions are Sukanya Samriddhi Yojana (meant for girl children) and the Senior Citizen Savings Scheme (for seniors).

5. Can senior citizens claim deductions for investing in post office savings accounts?

If you're a senior citizen, you can take advantage of Section 80TTB of the Income Tax Act.

6. Is there any maximum limit for deposits in post office savings accounts?

While you can add any amount of money to your Post Office Savings Account once it's opened, you'll need an initial deposit of Rs. 500 to get started.

 

Disclaimer: This page is provided for information only and contains information which has been gathered from other sources. We do not guarantee the veracity of the information provided or contained in it as such data may vary from time to time. The user is expected to verify with the respective source before making any decisions or actions.