Post Office Saving Schemes

Post office savings schemes are backed by the Government of India, ensuring low-risk for investors. These schemes are offered at competitive rates and allow you to invest in a range of investment options. This could range from recurring deposits to monthly income schemes.

These financial products are tailored to meet different financial goals, like retirement, child’s education, or wealth accumulation. Post office investment schemes provide a secure and reliable way to grow your wealth.

The Government of India sets the interest rates for post office investment schemes. These rates are reviewed periodically. Here’s an overview of the current post office saving scheme interest rates: 

• This account is similar to a savings account you hold with a bank

• The interest earned is taxed as per your income tax bracket and not subject to TDS 

• The minimum investment limit is ₹500 for account opening

• You must maintain a minimum balance of ₹500 at the end of each financial year 

• Interest earned from this post office investment plan is eligible for a deduction of up to ₹10,000 under Section 80TTA of the Income Tax Act, 1961

• This recurring deposit has a fixed 5-year tenure and the Interest is compounded quarterly

• You must invest a minimum of ₹100 per month in this post office savings scheme

• A penalty of ₹1 per ₹100 is applied for missed payments

• You could get up to 50% of the balance as a loan if you have made 12 instalments and continued the account for 1 year 

• The time deposit offered by the post office works like a bank issued fixed deposit with a tenure of 1 to 5 years 

• The minimum investment is ₹1,000 and in multiples of ₹100 with no limit on the maximum amount

• The post office savings scheme for time deposits can be pledged as collateral for loans

• The term deposit can be opened by up to 3 adults in a joint account

• The post office monthly income scheme provides regular returns, making it an attractive option for all types of investors

• You can invest a minimum of ₹1,000, with a maximum of ₹9 Lakhs for a single account and ₹15 Lakhs for a joint account

• The post office monthly investment scheme has a 5-year tenure and it allows account transfers between branches

• The post office senior citizen saving scheme is for individuals aged over 60 years and defence retirees over 50 years but under 60 years 

• Interest is paid quarterly in this scheme

• The minimum investment is ₹1,000, and the maximum is ₹30 Lakhs

• Premature withdrawal is allowed, subject to a penalty fee

• This post office saving scheme allows investments starting at ₹500, with a yearly cap of ₹1.5 Lakhs

• PPF has a 15-year lock-in period, extendable by 5-year blocks 

• The interest earned on PPF investments is tax-free

• Contributions are eligible for deductions of up to ₹1.5 Lakhs per year under Section 80C

• NSC is a 5-year post office savings scheme

• The minimum investment is ₹1,000 with no upper limit

• This investment allows you to claim deductions of up to ₹1.5 Lakhs under Section 80C  

• NSC can be pledged as collateral for loans 

• The scheme matures on the date set by the Ministry of Finance when the account is opened

• The minimum deposit is ₹1,000 with no maximum limit

• KVP can be transferred or pledged as security for a loan 

• KVP can be closed at any time before the maturity date, subject to certain conditions like account holder’s demise, court order, etc. 

• This is a post office savings scheme for girl child beneficiaries under 10 years old 

• The minimum investment is ₹250, with a maximum of ₹1.5 Lakhs per financial year

• The interest payout upon maturity is tax-free

• Contributions qualify for Section 80C deductions of up to ₹1.5 Lakhs per financial year

You can apply for a savings scheme at the post office through online and offline means. Here’s how it works:  

Online Method

Place a request for mobile and internet banking at the post office

1. Go to the official e-banking website

2. Use the activation code sent to you within 48 hours of account opening

3. 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 Method

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 differences between the savings schemes offered by the post office and other investment avenues. These distinctions are particularly evident in those 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 schemes offered by the post office are government-backed and risk-free. However, other savings schemes may carry some risk.

• Post office schemes offer tax benefits in the form of deductions under Section 80C. Some also provide tax-free interest.

• The Monthly Income Scheme and Senior Citizens Savings Scheme offers a regular income

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 of its saving schemes.  

The information provided by BFDL is related to the rates provided by Banks and Deposit taking NBFCs as available from public domain and under no circumstances is intended to be source of advice or recommendation of any financial investment advice or endorsement of any sort. BFDL disclaims any responsibility or liability regarding inaccuracies, omissions, mistakes etc. as well as offers and use of such information set out is entirely at the User’s own risk and User should exercise due care prior taking of any decision, on the basis of information mentioned hereinabove. Display of any intellectual property along with the related product information does not imply BFDL’s partnership with the owner of the intellectual property of such products and is solely for the purpose of information, unless otherwise provided by BFDL.