Post Office Savings Schemes: Interest Rates & Investment Options

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Indian Post offers a plethora of investment and savings schemes for a variety of investors, including individuals, a girl child. All the Post office investment schemes guarantee returns as the Government of India backs it. Moreover, few the post office investment schemes offer tax benefits up to INR 1.5 lakhs upon investment.

Latest Post Office Interest Rates 2024

Comparison of Different Post Office Savings Plans’ Interest Rates:

Scheme Name	Interest Rate	Minimum Balance	Maximum Investment	Eligibility	Tax Implications
Post Office Savings Account	4% p.a.	Rs. 20/-	No limit	Resident Indian, minor and major	Interest tax free up to Rs 50,000
Post Office Recurring Deposit Account (RD)	6.70% p.a.	Rs. 100/-	No limit	Resident Indian, minor and major	Interest income is added to the total taxable income and taxed as per the investors IT slab rate.
Post Office Time Deposit Account (TD)	6.90% to 7.50% p.a.	Rs. 1000/-	No limit	Resident Indian, minor and major	Tax benefits up to 5 years under Section 80C on deposits TDS deducted on interest more than Rs 40,000 p.a.(Rs 50,000 in case of senior citizens)
Post Office Monthly Income Scheme Account (MIS)	7.40% p.a.	Rs. 1000/-	Single Account – Rs 9,00,000 Joint Account – Rs 15,00,000	Resident Indian, minor and major	No tax benefits on interest. TDS deducted on interest more than Rs 40,000 p.a.(Rs 50,000 in case of senior citizens)
Senior Citizen Savings Scheme (SCSS)	8.20% p.a.	Rs. 1000/-	Maximum deposit over the lifetime allowed at Rs 30 lakh	Individuals of age more than 60 years, Or, Retired civilian or defense employees of age between 55 and 60 years	Tax benefit under Section 80C for deposits TDS to be deducted on interest earned for more than Rs 50,000 p.a.
Post Office Public Provident Fund	7.10% p.a.	Rs. 500/-	Rs 1.5 lakh per financial year	Resident Indian, minor and major	Tax exemption under Section 80C for deposits. Interest is tax-free.
National Savings Certificate	7.70% p.a.	Rs. 1000/-	No limit	Resident Indian, minor and major	Tax benefit under section 80C for deposits.
Kisan Vikas Patra (KVP)	7.50% p.a.	Rs. 1000/-	No limit	Resident Indian, minor and major	Interest is taxable.
Sukanya Samriddhi Yojana (SSY)	8.00% p.a.	Rs. 250/-	Rs 1.5 lakh per financial year	For Girl Child only – up to 10 years	Investment, interest and maturity amount tax exempted under Section 80C.

Post Office Schemes 2024

1. Post Office Savings Account

The post office savings account is one of the schemes that the Post Office offers. This post office savings scheme is available throughout India. Furthermore, the post office rate of interest on savings account is fixed on the deposit amount. Hence, the post office saving scheme is suitable for individuals seeking to earn fixed returns from their investments. One can open a savings account in post office with as low as INR 20.

Also, this post office saving scheme is quite popular in the rural parts of India. The Central Government decides the rate of interest for the post office savings account. Often, the rates are similar to the bank savings account. The post office saving account has an interest rate around 4% p.a., and the interest is calculated every month. Also, as per the Income Tax regulations, interest amount less than INR 50,000 per annum is tax-free in the hands of the depositor.

Furthermore, depositors can withdraw the deposits anytime they wish. However, they have to maintain a minimum balance of INR 50 in a generic account and INR 500 if they have a cheque facility. Also, the post office savings account can be easily transferred from one post office to the other.

Explore: Savings Account Interest Rates for all banks

2. Post Office Recurring Deposit Account (RD)

5 Year Post Office Recurring Deposit (PORD) Account allows investors to save on a monthly basis. The interest is compounded on a quarterly basis. This post office small savings scheme has a total of 60 monthly instalments. Post Office RD is suitable for individuals who wish to save through regular monthly deposits. The post office savings interest rates for this scheme is 6.70% p.a.. Furthermore, investors can estimate their returns from RD investments using RD calculator.

The minimum amount of investment is INR 10, with no cap on the maximum amount. All resident Indian nationals above the age of 18 years can open an account with the post office. Also, minors who are ten years old can open and operate the account jointly with their guardian. Furthermore, parents or guardians can open the account on behalf of their minor children.

One cannot prematurely withdraw their post office RD investments. However, in case of emergencies, one can break the RD. This comes with a penalty of INR 1 for every INR 100 investment. The RD account has a minimum lock-in period of three months. Also, if the premature withdrawal is made before three months, no interest is given. As a result, the depositors will only get back their principal amount.

Explore: How to Check Post Office RD Balance?

3. Post Office Time Deposit Account (TD)

Post Office Time Deposit (POTD) Account is one of the most popular post office savings schemes. The post office interest rates is 6.70% p.a. and are determined by the Finance Ministry every quarter. Furthermore, the rates are based on the yield of government securities and spread over the government sector yield.

Investments in a post office fixed deposit account have a minimum requirement of INR 1,000. One can open a TD account for any of the following tenures; one year, two years, three years and five years. Also, depositors can opt for reinvestment of the interest. However, this option is not available for one year TD. Additionally, one can also choose to redirect the interest to a five-year recurring deposit scheme.

You can easily transfer time deposits from one post office to the other. Also upon maturity, if the depositor doesn’t withdraw, the amount will be reinvested for the initial deposit tenure at the new applicable interest rates.

Investments in the post office fixed deposits qualify for a tax deduction in Section 80C of the Income Tax Act. Investors can claim tax benefits up to INR 1.5 lakhs per annum. They can claim the tax benefit when they file income tax returns.

4. Post Office Monthly Income Scheme Account (MIS)

POMIS is a low-risk investment scheme that offers regular monthly income to the depositors in interest payments. The Government of India backs POMIS and announces the interest rates every quarter. The current rate of interest is 7.40% p.a. POMIS has a lock-in period of five years. Upon maturity, the depositor can choose to either withdraw or reinvest the entire amount into the scheme.

The minimum amount for POMIS is INR 1,500, and the maximum limit is INR 9,00,000 per individual. However, for joint holding, the maximum limit is INR 15,00,000. Also, one can transfer their POMIS account from one post office to another. Furthermore, this post office savings scheme allows premature withdrawals post one year of account opening. However, these premature withdrawals have penalties.

5. Senior Citizen Savings Scheme (SCSS)

Senior Citizens Savings Scheme (SCSS) is a post office savings scheme suitable for senior citizens. The Government of India backs it. The post office saving scheme offers regular income as well as safety for depositors. The regular income is in the form of interest payments. The interest is calculated every quarter and credited to the investor’s account. The interest rates are revised every quarter. The SCSS interest rate for the current quarter is 8.20% p.a.

The minimum investment amount is INR 1,000 and a maximum of INR 15,00,000. This post office savings scheme has a five year lock-in period. Additionally, investors have an option to extend the scheme duration for another three years. Investments into SCSS qualify for tax exemption under Section 80C. However, the interest income is taxable. Also, TDS is deductible if the interest is more than INR 50,000.

Furthermore, SCSS allows investors to withdraw their investments prematurely. However, these withdrawals are subject to certain penalties. The penalty varies on the basis of the tenure of the account. Only after one year of account opening, the investors can prematurely withdraw their investments. Moreover, withdrawals within two years, attract penalty of 1.5% on the investment amount.

Also, for withdrawals after two years of account opening, the penalty is 1% on the deposit amount. In case of death of the depositor before the account maturity, the account shall be closed. The proceeds from the account will be given to their nominee or heir.

Explore Government Schemes 2024

6. Public Provident Fund Account (PPF)

Public Provident Fund (PPF) is a post office savings scheme launched by the National Savings Institute in 1968. The scheme guarantees returns as the Government of India backs it. For the current quarter the PPF interest rate is 7.10% p.a..

The Ministry of Finance revises the PPF interest rates every quarter. The scheme pays interest annually on 31^st March. However, the interest is calculated every month on the minimum balance from 5^th to 30^th of every month.

PPF investments have a fixed tenure of 15 years. However, investors can do partial withdrawal of their investments. Investors can withdraw at the end of 5 years. They can withdraw only 50% of the balance of the preceding year or end of 4^th year. Also, investors can opt for premature closure of their PPF account with a penalty of 1%.

However, the premature closure of PPF accounts is only allowed in certain conditions. One can also take a loan against their PPF investments between the 3^rd and 5^th year, and the terms of the loan are subject to change from time to time.

Investment in PPF is eligible for tax rebate under Section 80C of the Income Tax Act, 1961. Investments up to INR 1.5 lakhs qualify for tax benefits. Investors can claim the tax deduction while filing their income tax returns. Moreover, the interest and maturity amount is entirely tax-free as PPF falls under the EEE (Exempt – Exempt) category.

You may also like to read about the Post Office PPF

7. National Savings Certificates (NSC)

National Savings Certificate (NSC) is a small savings scheme that encourages savings among low income and mid-income groups. This post office scheme is a Government of India initiative, and hence the returns are guaranteed. The interest for the current quarter is 7.70% p.a. This fixed income savings scheme has a tenure of 5 years.

Hence the lock-in period is also five years. The scheme automatically reinvests the interest. Thus, the investors will receive the investment and interest amount upon maturity.

Investors can invest in NSC with an amount as low as INR 100. Only eligible investors can invest in NSC. Resident Indians are the only category who are eligible to invest in NSC. HUFs, NRIs and trusts cannot invest in NSC. One cannot withdraw their NSC investment prematurely except in case of death of the investor. However, one can always take a loan against their NSC investment.

Investment in NSC is eligible for tax deduction under Section 80C of the Income Tax Act, 1961. Investors can claim up to INR 1.5 lakhs as tax benefits while filing their income tax returns. The interest that is reinvested is eligible for a tax deduction as well. No TDS is applicable on interest. However, the investors have to pay income tax on the interest income at the end of 5 years.

8. Kisan Vikas Patra (KVP)

Kisan Vikas Patra (KVP) is a small savings scheme introduced for farmers. However, the scheme is extended to all residents of India. This post office savings plan guarantees income in the form of interest. The scheme pays a fixed interest of 7.50% p.a.. Furthermore, the Finance Ministry revises the interest rates every quarter—investment in this scheme doubles in 123 months (10 years and 3 Months).

Investors can invest with an amount as low as INR 1,000 in this scheme. Also, there is no limit on the maximum amount that one can invest. Indian citizens aged 18 years and above can invest in KVP schemes at any local post office. Investments beyond INR 50,000 require a PAN card as proof. Furthermore, for investments beyond INR 10 lakhs, investors have to submit income proofs.

The scheme has a lock-in period of 30 months, and investors cannot withdraw their investments during this time period. However, post the lock-in period, investors can withdraw their investments in intervals of 6 months. Investment in KVP is not eligible for tax deduction. Moreover, the interest income is taxable too. To estimate their tax liability, investors can use Income Tax Calculator.

Learn the Difference between: KVP Vs NSC

9. Sukanya Samriddhi Yojana (SSY)

Sukanya Samriddhi Yojana (SSY) is a Government of India initiative that supports the ‘Beti Bachao, Beti Padhao’ campaign. This post office savings scheme was launched in 2015 to promote girl child education and marriage. It is a fixed income scheme that guarantees returns in the form of interest. For the current quarter, the interest rate is 7.10% p.a. The interest is revised on a quarterly basis. Also, to estimate the returns that one can earn from this scheme, they can use the Sukanya Samriddhi Yojana Calculator.

Parents or guardians of a girl child can invest in this scheme on behalf of the girl before 10. Only resident Indians can invest in this scheme. The scheme matures when the girl turns the age of 21.

The scheme allows investments only until the age of 15. The minimum investment is INR 250, and the maximum investment is INR 1,50,000 per annum. The scheme allows only one account per girl child and two accounts per family. Also, in the case of twins, the number of accounts allowed is three.

This scheme doesn’t allow any premature withdrawals. However, the few exceptions are when the girl unfortunately dies or is fighting a life-threatening disease. Also, at the age of 18, 50% of the amount can be withdrawn for the purpose of higher education. Investment in SSY qualifies for tax exemption under Section 80C of the Income Tax Act, 1961.

Investors can claim a tax benefit up to INR 1.5 lakhs per annum. They can claim the tax benefit when they file an income tax return. Moreover, the interest and maturity amount is also free from tax as this scheme falls under the EEE category.

Explore our article on best child plans

How to Open a Post Office Saving Schemes Account?

Post Office Saving Schemes can be a good investment choice if you are looking for a low-risk way to save money. These schemes offer stable returns that do not depend on market conditions. They are perfect for investors who want to avoid risk and grow their savings. You can open a post office saving schemes account in any of the following ways:

Internet Banking

Go to the DOP Internet Banking website and click ‘New User Activation’.
After activating Internet banking, log in with your user ID and password.
Click ‘General Service’ and then ‘Service Request’.
Click ‘New Requests’ and choose the account type you want to open.
Fill out the application form and click ‘Submit’.

Mobile App

Download and log in to the ‘India Post Mobile Banking’ app.
Select the ‘Requests’ tab and choose to open a post office saving account.
Fill in the details, such as deposit amount, tenure, source account, nominee, etc. and submit.

Offline

Download and print the application form from the post office’s website.
Attach the necessary documents.
Go to your home post office branch and submit the form and documents to the staff.
Pay the minimum amount needed to open the account/scheme. The post office will check your application, open your account and give you a passbook.

Documents Required to Open Post Office Savings Scheme

The following are the documents necessary to open the post office savings scheme:

Account Opening Form
KYC Form (For new customers/modification in KYC details))
PAN Card
Aadhaar card/ Driving license/ Voter’s ID card/ Passport
Birth certificate for minor account.

Advantages of Investing in Post Office Investment Schemes

Following are the benefits of a post office saving schemes.

Hassle-free procedure and documentation:
Post Office saving schemes are easy to invest and enrol. The schemes have limited documentation and proper procedures. The investment options are suitable for both rural and urban investors. Also, the Government of India backs these investment options. Hence are safe.
Wide range of investment options
The post office offers a wide range of investment options for investors to choose from. Every scheme is unique with its features and benefits. They are hence allowing the investors to choose the best option that suits their investment requirements.
Interest rates
Interest rates of the post office schemes are in the range of 4% to 8.20%. These investments are also risk-free as the government backs them. Therefore, investors need not worry about their investments.
Long term investment options
The post office also offers long term investment options like PPF and SSY. These schemes are suitable for investors with a long term investment horizon. They help in good financial, retirement and also pension planning.
Tax exemption
Most post office investment schemes qualify for tax exemption under Section 80C. For example, schemes like SCSS, SSY and PPF. Also, for some schemes, the interest is tax-free as well.

Invest in the bank fixed deposits that best suit your needs.

Check Out Best Investment Options in India 2024

Frequently Asked Questions

Which is better, NSC or FD in the post office?

National Savings Certificate (NSC) is a small savings scheme. It encourages savings among low income and mid-income groups. With a minimum investment amount of INR 100 and a lock-in period of 5 years. While Post Office Time Deposit (POTD) is a popular savings scheme with tenures ranging between 1 year, 2 years, 3 years and 5 years.
The minimum investment amount is INR 1,000. Investments up to INR 1,50,000 in both the schemes qualify for tax exemption under Section 80C of the Income Tax Act, 1961.
Under NSC, the interest is automatically reinvested into the scheme and paid upon maturity along with the principal amount. While in POTD, the interest is paid out regularly unless the investor wishes to reinvest the interest into the scheme or five year RD scheme. However, this option isn’t available for one year TD.
The current interest rate for NSC is 7%, and for POTD of 1Y is 6.60%, 2Y is 6.80% and 3Y is 6.90%, and for 5Y TD, it is 7.00%.
Therefore, depending on the investor’s financial needs and investment duration, they can choose the best suitable scheme.

Can I withdraw money from any post office?

Yes, you can withdraw money from any post office.

Can I check my post office account online?

Yes, you can access your account online. Indian Post Office enables account holders to access their accounts using internet banking. You must have a valid individual or joint account, KYC documents and a DOP ATM card for this.

Is Post Office investment safe and tax-free?

Yes, post office investments are safe since they are backed by the Government of India. Furthermore, most post office schemes qualify for tax exemption under Section 80C of the Income Tax Act 1961.

Can Monthly Income Scheme (MIS) interest be credited to Recurring Deposit (RD) account?

No. Monthly interest from MIS scheme will be credited to post office savings account. Furthermore, you can provide a standing instruction to transfer money to RD account from the savings account.

Is there a Post Office Scheme available to students?

Except for Senior Citizens Savings Scheme (SCSS), all other post office schemes are available for students above the age of 18 years. Sukanya Samriddhi Yojana is available for a girl child.

How to save money in the post office?

To save money in the post office, you need to choose a suitable scheme and invest either online or offline.

Which scheme is best in the post office?

Post office offers many schemes suitable for different investor goals and needs. The choice of scheme largely depends on your financial goal and investment horizons. For instance, if you are saving for retirement, PPF is a suitable scheme. For senior citizens, SCSS is a suitable option. On the other hand, if you want to save for your girl child’s future, SSY is a suitable scheme.