The Department of Posts, Ministry of Communications, and the Government of India, which regulates the country’s postal system, have initiated a scheme known as Post Office Savings Schemes. Post Office Savings Schemes are government-sponsored small savings programs designed to encourage people of all financial backgrounds to save. . All Post Office Savings Scheme schemes are accessible through all Indian post offices, allowing for faster registration and enrollment. Currently, the government provides 9 postal savings schemes to the general public. Read below to check the detailed information related to the Post Office Saving Scheme like Types, Interest Rates, Benefits, Documents Required, Application Procedures, and much more.
Post Office Saving Scheme
These schemes are available throughout India, which include rural and remote areas that are underserved by banks and have limited access to investment products. The Post Office offers a variety of savings plans, some of which are solely Post Office investment vehicles. Investors can get guaranteed returns on their investments as well as tax benefits under these schemes. Post Office Investments offers a variety of savings plans with high-interest rates, tax benefits, and, most importantly, the Indian government’s self-governing guarantee. All of these plans are tax-free under Section 80c, which allows for a tax exemption of up to Rs 1, 50,000. Some services in the Post Office Savings Schemes provide efficiency and risk-free capital returns. There are 1.54 lakh post offices in the country that run such programs.
There are a few Post Office Savings Plans that outperform bank deposits. Such strategies have been established to provide possibilities for investment and to supplement Indian individuals’ savings
Post Office Savings Schemes Types
The various types of Post Office Savings Schemes are as follows:
- Public Provident Fund (PPF): Public Provident Funds are government-sponsored savings plans offered by banks and post offices. It is a long-term savings plan with a 15-year lock-in period that can be extended in 5-year increments. A minimal amount of 500 is required in a post office PPF account, and you can deposit up to 1.50 lakh. Investors could get tax exemptions on the principal amount of their investment, interest earned, and the sum obtained at maturity, in addition to guaranteed returns.
- Sukanya Samriddhi Yojana (SSY): Sukanya Samriddhi Yojana is a post office saving scheme for girl children aged 10 and under that is offered by both banks and post offices. The SSY account can be opened in a post office by parents or guardians for a period of up to 21 years. They must pay a minimum investment of 1,000 and can invest up to 1.50 lakh per year to keep the account active. EEE (Exempt- Exempt- Exempt) tax benefits are also available to investors.
- National Savings Certificate: A National Savings Certificate is a 5-year fixed investment scheme that can only be started at the post office. The minimum amount needed to invest in NSC is 100 rupees, and the highest limit that can be invested in NSC is unlimited. Under Section 80 C of the Income Tax Act, investors can deduct up to 1.50 lakh from their investment.
- Post Office Monthly Income Scheme: The Post Office Monthly Income Scheme is a savings strategy that enables investors to receive a monthly basis income after making a five-year lump-sum investment. You must deposit a minimum of 1,500 rupees in your accounts and can invest up to 4.50 lakh rupees in a single holding account and 9 lakh rupees in a joint account. However, there are no tax advantages to this savings plan.
- Kisan Vikas Patra: A Kisan Vikas Patra is a small savings approach that enables you to double one-time lump-sum funding over 10 years. A minimum deposit of 1,000 rupees is required, and the upper limit that can be invested in a KVP scheme is unlimited. The scheme, on the other hand, does not offer a tax break on investment.
- Post Office Recurring Deposit Account: The Post Office Recurring Deposit Account plan is a term deposit that enables people to make payments a fixed amount per month for 5 years that can be extended. They can invest as little as Rs 10 per month and earn fixed deposit rates of interest. Investors can get tax breaks up to 1.50 lakh on their invested money under Section 80 C of the Income Tax Act.
- Senior Citizens Savings Scheme: The Senior Citizens Savings Scheme is a 5-year investment scheme for senior citizens over the age of 60. SCSS benefits are provided to individuals between the ages of 55 and 60 who have opted for the Voluntary Retirement Scheme. They must deposit a minimum of $1,000 in their accounts and can invest up to $15,000. Under Section 80 C of the Income Tax Act, senior citizens can get tax exemptions on investments up to Rs. 1.50 lakh.
Post Office Savings Scheme Interest Rate
|Scheme Name||Interest Rate (% p.a)||Tenure||Best for|
|Post Office Savings Account||4.00||NA||Small savings|
|Post Office Monthly Income Scheme Account (MIS)||6.6||Five years||Small savings|
|5-Year Post Office Recurring Deposit Account (RD)||5.80||Five years||Small savings|
|Post Office Time Deposit Account (TD)||5.5||1, 2, 3, and 5 years||Small savings|
|Senior Citizen Savings Scheme (SCSS)||7.40||Five years||Retirement|
|Kisan Vikas Patra (KVP)||6.90||Lockin 30 months||Small savings|
|National Savings Certificate||6.80||Five years||Risk-averse investors|
|Public Provident Fund Account (PPF)||7.10||15 years||Risk-averse investors|
|Sukanya Samriddhi Accounts (SSA)||7.60||21 years||Girl child|
Benefits of Post Office Saving Scheme
Some of the key benefits of the Post Office Saving Scheme are as follows:
- Durable: Because the Post Office’s savings plans are backed by the government, they can be considered risk-free investment vehicles for your money.
- Savings plan for all social classes: In both rural and urban India, the Post Office Savings Scheme is suitable for people of all economic classes. Investors can easily invest in these because India has around 1.5 lakh post office branches.
- Guaranteed returns: Because the government sets the rate of interest on the Post Office Savings Scheme, investors can be confident in their investment returns. The Finance Ministry adjusts these rates every three months, and they range from 4% to 9%. There’s also a post office scheme that will double your money if you deposit at least 1000 rupees
- Tax benefits: Most of the post office’s savings schemes qualify for tax deductions of up to Rs 1.5 lakhs under Sec 80 C of the Income Act. Extra tax exemption on interest accrued and the amount received at maturity may be available on savings schemes such as PPF and SSY.
- Wide range of products: The post office offers a diverse and flexible range of savings schemes. Depending on their financial objectives, investors can choose from a variety of investment instruments. Post Office Time Deposit, Kisan Vikas Patra, Senior Citizen Savings Scheme, and other savings schemes are available through the Post Office.
Various Post Office Savings Schemes Comparison
|Scheme||Eligibility||Interest Rate||Minimum Investment||Maximum Investment||Tax Implications|
|Post Office Savings Account||Resident Indian, minor and major||4% per annum (p.a.)||–Rs 20–Non-cheque facility – Rs 50||No limit||Tax-free interest up to Rs 50,000 from the financial year 2018-19|
|Post Office Monthly Income Scheme Account (MIS)||Individual||6.6% per annum payable monthly||Rs 1,500||For one account holder – Rs 4.5 lakhJoint account holders – Rs 9 lakh||Interest earned is taxable, and no deduction under Sec 80C for deposits made.|
|Post Office Time Deposit Account (TD)||Individual||First-year – 5.5% p.a.Second-year – 5.5% p.a.Third Year – 5.5% p.a.Fourth Year – 6.7% p.a.||Rs 200||No limit||Tax benefits up to 5 years under Section 80C on deposits|
|15-year Public Provident Fund Account (PPF)||Individual||7.1% p.a. (Compounded annually)||Rs 500 per financial year||Rs 1.5 lakh per financial year||Tax rebate under Section 80C for deposits (maximum Rs 1.5 lakh p.a.)|
|Senior Citizen Savings Scheme (SCSS)||Individuals of age> 60 years or age >55 years who have opted for VRS or superannuation||7.4% p.a. (Compounded annually)||Rs 1,000||Maximum deposit over the lifetime allowed at Rs 15 lakh||– Tax benefit under Section 80C for deposits– TDS to be deducted on interest earned for more than Rs 50,000 p.a.|
|Sukanya Samriddhi Accounts||Girl Child – up to 10 years from birth and one additional year of grace||7.6% p.a. (Compounded annually)||Rs 1,000 per financial year||Rs 1.5 lakh per financial year||Investment (up to Rs 1.5 lakh exempt under Section 80C), interest, and amount received on maturity is tax-free|
|National Savings Certificates (NSC)||Individual||6.8% p.a. (Compounded annually)||Rs 100||No limit||Tax rebate under section 80C for deposits (maximum Rs 1.5 lakh p.a.)|
|Kisan Vikas Patra (KVP)||Individual (Adult)||6.9% p.a. (Compounded annually)||Rs 1,000||No limit||Interest is taxable, but no tax on the amount received on maturity|
While filling up the application form for Post Office Saving Scheme, some important documents will be needed by the applicants, make sure to keep them handy. The documents required for Post Office Saving Scheme are as follows:
- Account Opening Form
- Aadhaar Card
- PAN Card
- KYC Form
- DOB Certificate
- Voter ID card
- Job Card
Steps to Apply for Post Office Saving Scheme
Applicants need to follow the below-given steps to apply for the Post Office Saving Scheme
- First of all, visit your nearest branch of the Post Office
- Now, get the application form from the concerned department or download the form from the official website of the Indian Post Office
- Fill in the application form with all the required details
- After that attach all the required documents along with the KYC proof
- Now, submit the form to the concerned officials and pay the required deposit amount as per your scheme.