A detailed comparison between Post Office Saving Schemes
When it comes to opening a savings account, everyone immediately thinks about a bank account. But even today, many people are not aware that we can even open a savings account, and there are many investment schemes available at the post office in India. Unlike the banks, where we need to deposit some initial amount to open and maintain an account, the post offices in India encourage you to easily and quickly open a savings account without any such burdens. This has encouraged lakhs of people in India, especially children, and lower-income groups, to open an account in a post office.
Are you the one looking to know more about the post office saving schemes and open a post office savings account? There here is some useful information about the types of post office schemes available.
How do the Post office saving schemes benefit you?
- Hassle-Free: You can easily approach the post office employees and give your request to open an account. They will guide you in a proper way to quickly open an account on the very same day.
- Simple Procedures: The procedures to open an account in the post office for savings are simple. You don’t need to fill ample forms and submit multiple documents
- Simple Documentation: The documents required for an opening for a post office account is simple. Anyone can easily provide the documents and open an account quickly.
- Various Investment Options: Similar to banks or even more than banks, the post offices have various investment plans for people. You are flexible in choosing the plan according to your requirements and expectations
- Interest Rate: This is another amazing element of post office saving schemes. The post office interest rate will range from 4% to 7.60%. Therefore, you can expect to receive a good amount of return for your investment and your savings account.
- Long-Term Investment: Post offices also provide you with long-term investment options. You can therefore also plan and choose your retirement and pension plans that will suit you well
- Tax Exemptions: The post office schemes also qualify for tax benefits under Section 80C. The schemes like SCSS, SSY, PPF and a few other schemes provide you with tax exemptions.
10 Best Post Office Saving Schemes in India
Here follow some remarkable schemes offered by the post office;
- Monthly Income Scheme (MIS): Monthly Income Scheme is one of the most popular schemes offered by the post office. This savings scheme enables the investor to make a minimum deposit of Rs. 1000 and is considered to be the best scheme for low and middle-income people. This also comes under Section 80C tax exemption.
- Saving Account: This saving account is the most flexible and easiest scheme to open by all. It just requires Rs.20 to open a savings account, and you are welcome to invest any amount as your savings over the days. Moreover, this scheme provides an interest rate of 4%, which is calculated every month.
- Recurring Deposit (RD) Account: This allows you to save on a monthly basis. This scheme provides you with an interest rate of 5.8% per annum. The interest for this scheme compounds quarterly. The term for this scheme extends up to 60 months.
- TD – Time Deposit Account: This is another most popular post office scheme. The Finance Ministry determines the interest for this plan, and the rates are determined on the basis of government security that is spread across the government sector. The minimum investment for this TD account starts from Rs.1000/-.
- Senior Citizen Savings Scheme (SCSS): This scheme is designed for senior citizens, giving regular income and safety for your deposits. The income is based on the interest payment. The interest rate for this senior citizen saving scheme is 7.40% on a quarterly basis. This scheme also provides you with tax deduction benefits under Section 80C.
- Public Provident Fund (PPF) Account: The post office PPF interest rate is 7.1%. This interest rate is calculated every quarterly and calculated on a minimum balance basis. This scheme has a tenure of 15 years.
- National Saving Certificates (NSC): This is the most encouraging saving scheme for low-income and middle-income group people. National Saving Certificate offers an interest rate of 6.8%. This is a fixed income saving scheme with 5 years of tenure. The minimum amount that you can invest in this scheme is Rs. 100/-. This is the most feasible type of account to open by all.
- Kisan Vikas Patra (KVP): Kisan Vikas Patra (KVP) is another small type of saving scheme from the Post office. This encourages farmers a lot. This scheme is also extended to other people in India. It offers an interest rate of 6.9% and the term period extends to 124 months. Anyone over 18 years can choose this plan.
- Sukanya Samriddhi Account (SSY): In this plan, the interest rate offered is 7.6%. This especially encourages a girl child, and you can receive the return when the girl turns 21 years of age. The investment amount is only rs. 250/- minimum. The entry for this plan is up to 15 years of the age of the girl child.
- Fixed Deposit Scheme: In this plan is beneficial for anyone who wants to make a good saving without any interruption throughout the term period. The interest rate for this post office fixed deposit will yield a good return over the term period. If you are looking for a solid investment and saving for your children to manage their future higher studies and marriage or any other type of important future expenses, then this plan will be the best suit.
Post Office Savings Schemes Comparison
|Name of Scheme||Interest Rate||Minimum Investment||Maximum Investment||Eligibility||Tax Implications|
|Post Office Savings Account||4% per annum (p.a.)||–Rs 20 –Non-cheque facility – Rs 50||No limit||Resident Indian, minor and majors||Tax-free interest up to Rs 50,000 from the financial year 2018-19|
|Post Office Time Deposit Account (TD)||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||Individual||Tax benefits up to 5 years under section 80C on deposits|
|Post Office Monthly Income Scheme Account (MIS)||6.6% per annum payable monthly||Rs 1,500||For one account holders – Rs 4.5 lakh Joint account holders – Rs 9 lakh||Individual||Interest earned is taxable and no deduction under Sec 80C for deposits made.|
|Senior Citizen Savings Scheme (SCSS)||7.4% p.a. (Compounded annually)||Rs 1,000||Maximum deposit over the lifetime allowed at Rs 15 lakh||Individual of age> 60 years or age >55 years who have opted for VRS or superannuation||– Tax benefit under section 80C for deposits – TDS to be deducted on interest earned for more than Rs 50,000 p.a.|
|15-year Public Provident Fund Account (PPF)||7.1% p.a. (Compounded annually)||Rs 500 per financial year||Rs 1.5 lakh per financial year||Individual||Tax rebate under section 80C for deposits (maximum Rs 1.5 lakh p.a.)|
|National Savings Certificates (NSC)||6.8% p.a. (Compounded annually)||Rs 100||No limit||Individual||Tax rebate under section 80C for deposits (maximum Rs 1.5 lakh p.a.)|
|Kisan Vikas Patra (KVP)||6.9% p.a. (Compounded annually)||Rs 1,000||No limit||Individual (Adult)||Interest is taxable but no tax on the amount received on maturity|
|Sukanya Samriddhi Accounts||7.6% p.a. (Compounded annually)||Rs 1,000 per financial year||Rs 1.5 lakh per financial year||Girl Child – up to 10 years from birth and one additional year of grace||Investment (up to Rs 1.5 lakh exempt under Section 80C), interest and amount received on maturity is tax free|
The post office also provides various other types of plans for the benefit of low-income and middle-income groups of people. These plans are easily openable and manageable. Besides, for the benefit of the people, the Indian government also updates and upgrades new plans or the existing plans with changes. This is an additional feature that will benefit everyone with high returns and many more added benefits.