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Post Office Saving Schemes are issued and managed by the Government of India.

They have always been a favourite amongst the people to park their funds. These are risk-free investment avenues which are ideal for tax-saving too. If you are looking for a long-term guaranteed way of generating wealth, then Post Office savings schemes are ideal as they carry a sovereign guarantee. The legislative has ensured that your hard-earned money is not only invested with a risk-free return, but practical needs of the wage-earning class can also be taken into account.

Given below are 9 Post Office Saving Schemes offering interest rates varying from 4 per cent to 8.3 per cent.

1. National Saving Certificate

Return- 7.6%, compounded annually and payable at maturity

The minimum investment amount is Rs 100 and in multiples of Rs 100 and there is no maximum limit. The deposit amount qualifies for tax deduction under section 80C of the I-T Act. The interest accrued annually and deemed to be reinvested is allowed deduction under section 80C of the Income Tax Act.

2. 15-year Public Provident Fund

Return- 7.6% per annum, compounded yearly

Maximum investment allowed is Rs 150,000 in a financial year. Depositors can invest in lump-sum or in twelve instalments. Moreover, a joint account is allowed. Nomination and transfer facility are available. The maturity period of 15 years can be extended for further 5 years and so on. Premature closure is not allowed before 15 years. Deposits are qualified for deduction under section 80C of the I-T Act. Also, the interest is completely tax-free.

3. Senior Citizen Saving Scheme

Return- 8.3% per annum and interest payable on 31stMarch, 30th June, 30th Sept and 31st December in individual or joint capacity

The maximum limit is Rs 15 lakh. An individual of age 60 years or more may open the account. The depositor has an option of opening the account below Rs 1 lakh by cash and for Rs 1 lakh and above by cheque only. Nomination and transfer facility are available. The tax will be deducted at source if the interest amount is more than Rs 10,000.This investment qualifies for the tax benefit under section 80C of the Income Tax Act, 1961.

4. 5-year Post Office Recurring Deposit Account

Return- 6.9% per annum, compounded quarterly on individual/joint account

An account can be opened by cash or cheque. Nomination and transfer facilities are available. An account can be opened in the name of a minor and a minor of 10 years and above can open and operate the account. One withdrawal up to 50% is allowed after one year. Premature closure is permissible after 3 years.

5. Post Office Time Deposit Account

Return- 6.6% for one year a/c, 6.7% for two years a/c, three years a/c and 5 years a/c 7.4% for an individual

Nomination and transfer facilities are available. An account can be opened in the name of a minor and a minor of 10 years and above can open and operate the account. However, on attaining majority, the minor has to apply for conversion of the account. This investment qualifies for the benefit of section 80C of the Income Tax Act, 1961. Minimum of Rs 200 is required for opening of an account.

6. Post Office Monthly Income Scheme Account

Return- 7.3% per annum payable monthly to individual/joint

The minimum amount required for opening the account is Rs1500 and maximum investment limit is Rs 4.5 lakh in a single account and Rs 9 lakh in a joint account. Nomination and transfer facilities are available. The maturity period is 5 years. An account can be opened in the name of a minor and a minor of 10 years and above can open and operate the account. It can be prematurely en-cashed after one year but before 3 years at a deduction of 2% of the deposit and after 3 years at a deduction of 1% of the deposit. A bonus of 5% on principal amount is admissible on maturity.

 7. Sukanya Samriddhi Account

Return- 8.1% per annum compounded yearly.

The minimum contribution is Rs 1000 and a maximum amount is Rs 150,000 in a financial year. There is no limit on the number of deposits either in a month or in a financial year. The account can be closed after the attainment of 21 years of age by a girl child. Partial withdrawal is allowed for education and marriage expenses after the girl child attains the age of 18 years. The account can be opened up to age of 10 years only from the date of birth. A guardian can open only one account in the name of one girl child and maximum of two accounts in the two girl children.

8. Kisan Vikas Patra

Return- 7.3% compounded annually.

Minimum investment required is Rs 1000 and there is no maximum limit. A certificate can be purchased by an adult for himself or on behalf of a minor. The maturity period is 9 years and 10 months. Facility of nomination and transfer is available. The lock-in period is 2.5 years.

9. Post office savings accounts

Return- 4% interest rate per annum on individual/ joint accounts.

Post Office Saving Accounts require a minimum amount of Rs 20. This account can be opened in one post office and can be transferred from one to another. At least one transaction of deposit or withdrawal in three financial years is necessary to keep the account active. The savings account of post offices also offers an ATM facility.

Last modified on Thursday, 28 June 2018

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