The post office Saving Schemes is one of the oldest organizations in India, which was established in October 1854 during the British era. Initially, it focused only on delivering mail (post), but later expanded to provide other financial services such as banking, insurance, and investments.
One of the major advantages of post office saving schemes is that they come with a sovereign guarantee, meaning they are backed by the government. Additionally, some of these schemes also offer tax-saving benefits under Section 80C of the IT Act.
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Post Office Saving Schemes
The Post Office Savings Acc. is one of the schemes offered by the Post Office Investments.
- It has been operational since Oct 1854 and requires a minimum deposit of Rs 500 to open an account.
- The account can be opened in single or joint ownership by domestic customers.
- Deposits made to the account earn an interest rate of 4% p.a. On request, account holders can avail of additional services such as a chequebook, ATM card, e-banking, and mobile banking services.
- The interest earned on deposits is credited at the end of each financial year. Individuals can also claim a tax deduction of up to Rs 10,000 from their total income under Section 80TTA of the IT Act.
Documents Needed for Post Office Saving Schemes
- Form (relevant)
- KYC Form
- Job card
- Proof of date of birth
- Driving license
- Voter’s ID card
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Steps to Open a Recurring /Term Deposit Account Through Mobile
- Download the app and log in to the India Post Mobile Banking app from your mobile Google Play Store.
- After successfully logging in, select the ‘Requests’ on the home screen to open your POFD account.
- Enter all the required details in it, such as the deposit amount, tenure, the account from which you want to deposit the money, the nominee, and others to open the account.
To open an account under any other post office saving scheme, you need to visit the home branch of the post office.
Steps to Open Post Office Savings Scheme Offline
- You can Download and print the relevant application form which you can get from the post office’s official website.
- Attach all the necessary documents.
- Now visit your home branch near you of the post office and submit the form and all the documentation to the relevant personnel.
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List of Schemes with Interest Rates
|Scheme Name||Interest Rate in %||Min Investment (Rs)||Max Investment||Eligibility Criteria||Tax Implications|
|Post Office Savings Acc.||4%||500||No limit||Individuals including Minors||Exempted Interest up to ₹10,000|
|National Savings Recurring Deposit Acc.||5.8%||100 per month in multiples of 10||No limit||Individuals including Minors||–|
|National Savings Time Deposit Acc.||5.5% – 6.7%||1,000 and multiples of 100||No limit||Individuals also minors||5 Years – Section 80C deduction on deposits|
|National Savings Monthly Income Acc.||6.6% p.a. Payable per monthly||1,000||single A/C – Max Rs 4.5 lakh Joint A/C – Rs 9 lakh||Individual also minors||The interest earned is taxable, and as per Sec. 80 C, there are no deductions on the deposits,|
|Sr Citizen Savings Scheme Acc.||7.4% p.a. (Compounded Annually)||1,000||Max is Rs 15 lakh||Persons more than 60 years and above 50 years of age||Tax benefits on deposits as per Sec 80 CTDS are deducted if your interest earned is more than Rs 50,000Interest taxable if more than Rs 50,000|
|Public Provident Fund Acc. (PPF)||7.1% p.a. (Compounded Annually)||500||Max is 1.5 lakh/financial year||Individuals and also minors||Tax relief is given under section 80C for tax-free depositsInterest earned is also Tax-free|
|National Savings Certificates (NSC)||6.8% p.a.but payable at maturity||1,000||No Limit||Individuals and also minors||Deposits qualify for tax exemption under 80C|
|Kisan Vikas Patra Acc.||6.9% p.a.||1,000||No limit||Individuals and also minors||The interest is taxed, but the amount received upon maturity is tax-free|
|Sukanya Samriddhi Acc.||7.6% p.a.||250||Max is 1.5 lakh/ financial year||A girl child below 10 years is eligible. To be opened in the name of the girl child by the guardian||–|
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Compare All Post Office Interest Rates 2023
|Scheme Name||Interest Rate in %||Min Balance Required|
|Post Office Savings Acc scheme||4.00% p.a.||Rs. 20/-|
|Post Office Recurring Deposit Account||5.80% p.a.||Rs. 100/-|
|Post Office Time Deposit Account||7% p.a.||Rs. 1000/-|
|Post Office Monthly Income Scheme Account||7.10% p.a.||Rs. 1000/-|
|Senior Citizen Savings Scheme||8% p.a.||Rs. 1000/-|
|Post Office PPF||7.10% p.a.||Rs. 500/-|
|National Savings Certificate Scheme||7% p.a.||Rs. 1000/-|
|Kisan Vikas Patra||7.0% p.a.||Rs. 1000/-|
|Sukanya Samriddhi Accounts||7.60% p.a.||Rs. 250/-|
Benefits of Post Office Saving Schemes in India
- Easy to Invest: These savings schemes are simple to enroll in and are suitable for both rural and urban investors. They provide a fixed and decent return to hedge portfolio risks and are a popular savings cum investment option.
- Documentation and Procedures: With limited documentation and proper procedures, the post office ensures that these schemes are easy to opt for and safe to invest in, as they are backed by the government.
- Fulfillment of Investment Goals: These schemes are long-term oriented, with a maximum investment period of 15 years for a PPF account, making them ideal for retirement and pension planning.
- Tax Exemption: Most schemes are eligible for all tax rebates under the Section 80C for the deposit amount, and some, like the PPF and Sukanya Samriddhi Yojana, offer tax exemption on the interest earned.
- Interest Rates: The interest rates on these schemes range from 4% to 9%, and they are risk-free as the Government of India guarantees them with minimal risk involved.
Post Office Time Deposit (TD) Account
The post office time deposit TD account offers you four different tenures: 1 year, 2 years, 3 years, and 5 years tenures. The minimum deposit required for this acc to open is Rs 1,000. Interest is calculated quarterly of the year but is paid out annually. The interest rates for the fourth quarter of the 2022-23 fiscal year, which runs from 1 Jan 2023 to 31st March 2023, are as follows:
- 1-year account: 6.6%
- 2-year account: 6.8%
- 3-year account: 6.9%
- 5-year account: 7%
Post Office Schemes explain
Post Office Savings Account – Similar to a regular bank savings account, this account can be transferred from one post office to another.
National Savings Recurring Deposit Account – This scheme is designed to help small and poor investors save money for future needs. The account can be opened by either an adult or two adults jointly.
National Savings Time Deposit Account – This scheme offers a tax benefit for investments made in a 5-year post office time deposit. The investment qualifies for a deduction under Section 80C of The Income Tax Act, 1961.
National Savings Monthly Income Account – Investors contribute a certain amount and earn a fixed interest every month through this scheme.
Senior Citizen Savings Scheme Account – This scheme is designed for 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.
Public Provident Fund Account – This long-term investment scheme offers tax exemptions and attractive interest rates, as decided each financial year, and is considered a safe post office deposit scheme.
National Savings Certificate (NSC) – This fixed-income investment scheme can be opened with a post office, offering savings bonds that encourage small or mid-income investors to invest while saving on income tax.
Kisan Vikas Patra Account – This certificate scheme from the post office can potentially double as a one-time investment in a period of approximately 9 years and 10 months.
Sukanya Samriddhi Account – This savings scheme, launched by the Government of India, is designed to financially benefit the girl child by enabling parents to build capital for future education and marriage expenses and offers an attractive interest rate on the investment.
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