Post office in India was founded by the British in October 1854. Initially it focused only on delivering mail (post) but later diversified into an array of other financial services i.e., Banking, Insurance & Investments.
People invest in various schemes offered by the post office for various reasons, but the biggest advantage of the post office schemes is their sovereign guarantee i.e., it is backed by the government. Some of the post office savings schemes also offer tax-savings benefits U/S 80C of the Income Tax Act.
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| Scheme | Interest Rate (Updated) | Minimum Investment (Rs) | Maximum Investment | Eligibility | Tax Implications |
| Post Office Savings Account | 4 per cent | 500 | No limit | Individuals including Minors | Exempted Interest up to ₹10,000 |
| National Savings Recurring Deposit Account | 5.8 per cent | 100 per month in multiples of 10 | No limit | Individuals including Minors | – |
| National Savings Time Deposit Account | 5.5 per cent – 6.7 per cent | 1,000 and multiples of 100 | No limit | Individuals including minors | Section 80C deduction on deposits for 5 Years |
| National Savings Monthly Income Account | 6.6 per ceny p.a. payable monthly | 1,000 | Max Rs 4.5 lakh for single A/C and Rs 9 lakh for Joint A/C | Individual including minors | The interest you earn is taxable and there are no deductions on the deposits, as per Sec 80 C |
| Senior Citizen Savings Scheme Account | 7.4 per cent p.a. (Compounded Annually) | 1,000 | Max Rs 15 lakh | Persons more than 60 years of age and above 50 years of age who have taken VRS or superannuation. | There are tax benefits on scheme deposits as per Sec 80 C |
| TDS is deducted if the interest earned is more than Rs 50,000 | |||||
| Interest taxable if more than Rs 50,000 | |||||
| Public Provident Fund Account (PPF) | 7.1 per cent p.a. (Compounded Annually) | 500 | Max 1.5 lakh per financial year | Individual and minors | Tax relief available under section 80C for deposits |
| Interest earned is tax-free | |||||
| National Savings Certificates (NSC) | 6.8 per cent p.a. (Compounded Annually) but payable at maturity | 1,000 | No Limit | Individual and minors | Deposits qualify for tax exemption under 80C |
| Kisan Vikas Patra Account | 6.9 per cent p.a. (Compounded Annually) | 1,000 | No limit | Individual and minors | The interest is taxed but the amount received upon maturity is tax-free |
| Sukanya Samriddhi Account | 7.6 per cent p.a. (Compounded Annually) | 250 | Max 1.5 lakh per financial year | Girl child below the age of 10 is eligible. To be opened in the name of the girl child by the guardian | – |
Post Office Savings Account – It acts as a normal savings account of any bank and the account is transferable from one post office to another.
National Savings Recurring Deposit Account – The Scheme helps small/poor investors to form a corpus to meet their future needs. An account is either opened by an adult or by two adults jointly.
National Savings Time Deposit Account – There is a tax benefit for the investment made in the 5-year post office time deposit. The investment qualifies for the deduction under Section 80C of The Income Tax Act, 1961.
National Savings Monthly Income Account – This is a scheme in which investors contribute a certain amount and earn a fixed interest every month.
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Senior Citizen Savings Scheme Account – The Scheme is a savings instrument offered to Indian residents aged over 60 years. The deposit matures after 5 years from the date of account opening but can be extended once by an additional 3 years by the investor.
Public Provident Fund Account – Public Provident Fund is a long-term investment scheme declared by the Government of India. It is a safe post office deposit scheme that offers tax exemptions and attractive interest rates as decided each financial year.
National Savings Certificate (NSC) – The Scheme is a fixed income investment scheme that one can open with a post office. As part of an initiative from the Government of India, it is a savings bond that encourages subscribers, primarily small or mid-income investors, to invest while saving on income tax.
Kisan Vikas Patra Account – Kisan Vikas Patra is a certificate scheme from the post office. It may actually double as a one-time investment in a period of approximately 9 years & 10 months.
Sukanya Samriddhi Account – SSY is a savings scheme launched by the Government of India, for the financial betterment of the girl child. The scheme enables parents to build capital for the future education and marriage expenses of their female child and provides an attractive interest rate on the investment.
How to Apply for a Savings Scheme in Post Offic
Step 1: Visit the closest post office branch.
Step 2: Get the form to open the relevant account from the post office. However, you can also download the form online from the official portal of the Indian Post Office.
Step 3: Fill in the form with the needed details and submit it along with the KYC proof. You will also have to give other documents as required.
Step 4: Finish the process of enrolment by depositing the amount of the scheme you chose.
Required Documents for Post Office Saving Schemes
- Form (relevant)
- KYC Form
- PAN
- Aadhaar
- Driving license
- Voter’s ID card
- Job card
- Proof of date of birth
Advantages of Investments in Post Office Schemes
- Simple investment process
- Post office saving schemes are easy to enrol in and require limited documentation as simple procedures in post offices ensure that these saving schemes are safe investment tools and provide a fixed return as they are backed by the government.
- Easily Accessible
These schemes are best suited for the rural and the urban investors as Post offices are in every corner of the country. To cater to the uneducated and rural population, these are simple and thus make these a much-preferred savings option.
- Long-term Benefits: The investments in the Post Office Schemes are more future and long-term oriented as it can be the best retirement or pension plan with the investment period extending up to 15 years for a PPF account. With this kind of Investment scheme, an investor can diversify his/her portfolio for a risk-free and fixed return.
- Risk-free and Competent Interest Rates: Interest rates in post office savings schemes range from 4% to 8% which is also risk-free and highly competitive with Banks. There is a minimal amount of risk involved as this is regulated by the Government of India.
- Customized Products to Suit Investor Needs: The Post Office of India provides suites of different products to cater to different investor grades. The products on offer vary with tax implications, investment horizons and expected returns as per the requirements of the investor.
