Your Guide To Post Office Savings Schemes

India is a vast country and in spite of all the efforts banking has not reached all corners of the country. At the same time, post offices or the India Post has spread its wings far and wide. There were close to 1,55,000  post offices, the largest number in the world as of 2014. These post offices not only pave way for communication for the people but also act as an avenue for holding savings schemes.

Let us look at the various schemes available for investment through at India Post and the returns that they provide.

Post Office Monthly Income Scheme:

This is one of the most popular schemes available for risk-free returns. A lump sum amount is invested in the account and gains monthly income and at the end of the term of investment, the principal is also paid back. The amount of investment ranges between Rs 1500 and Rs 4.5 lakhs for single account holders. Joint holding is also allowed where the maximum amount is doubled to Rs 9 lakhs. The current interest rate is 7.3% payable monthly. Maturity period for these accounts is 5yrs. These schemes are good for retirees and other individuals looking for the safety of their principal amount.

Additional Reading: Top 5 Recurring Deposit Scheme in India

Sukanya Samriddhi Account:

The next one is a savings scheme specially designed to secure the future of girls. A special account that can be opened by a guardian/parent for the girl child. The minimum annual deposit amount is Rs 1500 and the maximum is Rs 1,50,000. This account can be opened up to the age of 10 of a girl child. The interest payable is 8.1% and the account matures when the child turns 21.

Post Office Recurring Deposit Scheme:

This is a plain vanilla monthly investment scheme that fetches you an interest of 6.95% per annum which is compounded quarterly. Amount as less as Rs 10 can be invested each month and there is no maximum limit that you could invest. This scheme is a good investment avenue for those who want to put away a fixed amount into saving each month. The interest rate offered is comparable with most bank RD rates.

Post Office Time Deposit Scheme:

A fixed deposit scheme at post office functions in a similar fashion as a bank fixed deposit. A minimum of Rs 10 can start off your time deposit account. There is no maximum threshold. The accounts could be opened in single or joint mode could be changed at any time. The interest paid varies according to the term of the investment. As you can see that the longer the period of investment the better the returns from the post office.

 

1 yr.A/c	6.6%
2yr.A/c	​6.7%
3yr.A/c	6.9%
​​5yr.A/c	7.4%

Senior Citizen Savings Scheme: This is a fixed time deposit account available only for senior citizens aged 60 and above. However, an individual aged 55 and above but who have opted for VRS is also eligible for opening this account. The rate of interest is 8.3% which is payable every quarterly. Accounts can be opened in a joint mode with spouse only. The maturity period is 5 years. After maturity, the account can be extended for a further period of 3 years. Income tax benefit under Section 80C is also available.

National Savings Certificate:  Any individual can buy these certificates. It is allowed in single mode only. The same can be purchased by a minor too. The current interest rate is 7.6% compounded quarterly but is paid only on maturity of the investment. The minimum investment is Rs 10 and there is no maximum sum specified.

15-year Public Provident Fund: A PPF account at Post Office can be opened only in single mode with a maturity period of 15 years. There are no premature withdrawals allowed before this term. An individual needs to deposit a minimum of Rs 500 each year with the maximum amount being Rs 1,50,000/-. The interest is compounded yearly and is completely tax-free on withdrawal, which makes it an attractive scheme for investment. The current rate of interest is 7.6% per annum.

Kisan Vikas Patra: KVP is a financial instrument that can be purchased at post offices by an adult for himself or on behalf of a minor or by two adults. The rate of interest offered is 7.3% compounded annually. The amount invested in this instrument doubles in 110 months. The certificate can be encashed after 2.5years. This makes the certificate very liquid and was intended for benefit of small investors like farmers etc from remote areas.

In addition to all these schemes, one could also open a savings account like any bank at India Post. An interest of 4% is payable and ATM card facility is also available.

 

Scheme	Maximum Returns
Monthly Income Scheme	7.3% per annual payable monthly
Sukanya Samriddhi	8.1% compounded annually
Post office recurring scheme	6.95 % per annum
Senior Citizens Savings Scheme	8.3% annually
Kisan Vikas Patra	7.3% annually
15-year PPF	7.6% annually
National Savings Certificate	7.6% annually
Post office time deposit scheme	7.4% for 5 years

 

There are many schemes available for investment at the post offices for all kinds of needs of individuals and we hope that this would give a comprehensive view about the various options available for people through the postal services.

India is a vast country and in spite of all the efforts banking has not reached all corners of the country. At the same time, post offices or the India Post has spread its wings far and wide. There were close to 1,55,000  post offices, the largest number in the world as of 2014. These post offices not only pave way for communication for the people but also act as an avenue for holding savings schemes.

Let us look at the various schemes available for investment through at India Post and the returns that they provide.

Post Office Monthly Income Scheme:

This is one of the most popular schemes available for risk-free returns. A lump sum amount is invested in the account and gains monthly income and at the end of the term of investment, the principal is also paid back. The amount of investment ranges between Rs 1500 and Rs 4.5 lakhs for single account holders. Joint holding is also allowed where the maximum amount is doubled to Rs 9 lakhs. The current interest rate is 7.3% payable monthly. Maturity period for these accounts is 5yrs. These schemes are good for retirees and other individuals looking for the safety of their principal amount.

Sukanya Samriddhi Account:

The next one is a savings scheme specially designed to secure the future of girls. A special account that can be opened by a guardian/parent for the girl child. The minimum annual deposit amount is Rs 1500 and the maximum is Rs 1,50,000. This account can be opened up to the age of 10 of a girl child. The interest payable is 8.1% and the account matures when the child turns 21.

Post Office Recurring Deposit Scheme:

This is a plain vanilla monthly investment scheme that fetches you an interest of 6.95% per annum which is compounded quarterly. Amount as less as Rs 10 can be invested each month and there is no maximum limit that you could invest. This scheme is a good investment avenue for those who want to put away a fixed amount into saving each month. The interest rate offered is comparable with most bank RD rates.

Post Office Time Deposit Scheme:

A fixed deposit scheme at post office functions in a similar fashion as a bank fixed deposit. A minimum of Rs 10 can start off your time deposit account. There is no maximum threshold. The accounts could be opened in single or joint mode could be changed at any time. The interest paid varies according to the term of the investment. As you can see that the longer the period of investment the better the returns from the post office.

1 yr.A/c	6.6%
2yr.A/c	​6.7%
3yr.A/c	6.9%
​​5yr.A/c	7.4%

 

Senior Citizen Savings Scheme: This is a fixed time deposit account available only for senior citizens aged 60 and above. However, an individual aged 55 and above but who have opted for VRS is also eligible for opening this account. The rate of interest is 8.3% which is payable every quarterly. Accounts can be opened in a joint mode with spouse only. The maturity period is 5 years. After maturity, the account can be extended for a further period of 3 years. Income tax benefit under Section 80C is also available.

National Savings Certificate:  Any individual can buy these certificates. It is allowed in single mode only. The same can be purchased by a minor too. The current interest rate is 7.6% compounded quarterly but is paid only on maturity of the investment. The minimum investment is Rs 10 and there is no maximum sum specified.

15-year Public Provident Fund: A PPF account at Post Office can be opened only in single mode with a maturity period of 15 years. There are no premature withdrawals allowed before this term. An individual needs to deposit a minimum of Rs 500 each year with the maximum amount being Rs 1,50,000/-. The interest is compounded yearly and is completely tax-free on withdrawal, which makes it an attractive scheme for investment. The current rate of interest is 7.6% per annum.

Kisan Vikas Patra: KVP is a financial instrument that can be purchased at post offices by an adult for himself or on behalf of a minor or by two adults. The rate of interest offered is 7.3% compounded annually. The amount invested in this instrument doubles in 110 months. The certificate can be encashed after 2.5years. This makes the certificate very liquid and was intended for benefit of small investors like farmers etc from remote areas.

In addition to all these schemes, one could also open a savings account like any bank at India Post. An interest of 4% is payable and ATM card facility is also available.

 

Scheme	Maximum Returns
Monthly Income Scheme	7.3% per annual payable monthly
Sukanya Samriddhi	8.1% compounded annually
Post office recurring scheme	6.95 % per annum
Senior Citizens Savings Scheme	8.3% annually
Kisan Vikas Patra	7.3% annually
15-year PPF	7.6% annually
National Savings Certificate	7.6% annually
Post office time deposit scheme	7.4% for 5 years

 

There are many schemes available for investment at the post offices for all kinds of needs of individuals and we hope that this would give a comprehensive view about the various options available for people through the postal services.