Best Post Office Saving Schemes in India – Their Interest Rate and Eligibility

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A complete list of some of the best saving plans operated by the Indian Post Office, along with the rate of interest and eligibility criteria for each.

A large population in our country lives in the rural areas where financial planning isn’t really a priority. To encourage this section of the society (the economically weak and downtrodden) to save a little for the future, the Indian Post Office has come up with a number of financial schemes. Here we look at some of these schemes run by the post office based on the interest rate and eligibility criteria to apply for each, to help you make an informed choice for investment in the best saving plan.

In fact, some of these plans are also designed specifically for women, children, and the elderly, to help them plan a better future for themselves and be able to meet their financial goals. Let’s take a look at some of these post office savings schemes.

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Top 4 Post Office Saving Schemes in India

Here are some of the most popular and best saving plans operated by the Indian Post Office at the moment:

1.Post Office Recurring Deposit (RD): RD stands for Recurring Deposit, which essentially, as the name suggests, is money deposited in an account in a recurring manner. It therefore implies that this is a post office monthly saving scheme intended to encourage regular saving and investment habits among people. The plan is designed to facilitate investments monthly and promises good returns.

Type of Account Single, Joint (up to 3 adults allowed), minor (joint account with a parent/guardian) and independent minor a/c over 10 years old
Opening Procedure The applicant needs to open a National Savings Recurring Deposit Account at the Post Office by filling out a Purchasing Certificate Form
Rate of Interest 5.80% p.a. on both single and joint a/c payable upon maturity
Tenure 5 years
Investment Minimum – Rs. 100; Maximum – no limit
Type of Investment Monthly
Mode of Investment Cash/cheque/net banking
Premature Withdrawal After 3 years of opening of the a/c
Tax Exemption Upto Rs. 1.5 lakh annual exemption allowed to investors under Section 80C of the ITA; interest not tax-exempted

2. Post Office Savings Account
:
Yet another of the best money saving plans, this one is backed by government support and is therefore preferred by a number of investors. Some of its top features are listed below.

Type of Account Single, Joint (up to 2 adults allowed), minor (joint account with a parent/guardian), join account with a mentally unsound person, and independent minor account over 10 years of age
Opening Procedure Download the application form from the official website of the Department of Posts or collect one from a post office near you. In case of silent/inactive account for 3 years, fresh application needed
Nomination Mandatory
Rate of Interest 4% p.a.
Investment Minimum – Rs. 500; Maximum – no limit. Minimum balance needed per month to maintain the account – Rs. 10
Withdrawal Full withdrawal possible (over Rs. 50) at a post office near you; however minimum Rs. 500 balance needed in the account for maintenance; zero-balance accounts are liable for Rs. 100 fine or permanent closure in case minimum balance not maintained for 3 years
Tax Exemption Upto Rs. 10,000 lakh annual exemption allowed to investors on the interest earned under Section 80TTA of the ITA
Risk Involved None

3. Sukanya Samriddhi
:
Considered the best saving plan for child, the Sukanya Samriddhi Account or SSA is backed with government support particularly for girl child in India. This post office saving scheme for girl child is specifically designed by the government to support the educational, marriage and other future financial expenses of girls in India.

Note that there is also a post office saving scheme for boy child. Among the many options, the Ponmagan Podhuvaippu Nidhi Scheme is popular; however, it is only available currently in the post office branches of Tamil Nadu and Pondicherry.

Type of Account Single, opened by a guardian in the name of a girl child below 10 years old or for maximum 2 girl children in a family; two accounts can be opened in case of twins or triplets
Maturity 15 years
Rate of Interest 7.6% p.a.; determined by the Ministry of Finance every quarter
Investment Minimum – Rs. 250; Maximum – upto Rs. 1.5 lakh per annum; can be invested in several installments or as a lump sum
Withdrawal Amount can be withrawn only partially when the girl child is 18 years old; up to 50% of the balance
Tax Exemption Tax deductions permissible for interest below Rs. 1.5 lakh per annum under Section 80C of the ITA, 1961
Risk Involved None

4. Senior Citizen Savings Scheme: The post office senior citizen saving scheme is specially run for the elderly in the country to help them lead a comfortable life post retirement. The senior citizens are allowed to earn interest on the lump sum investment every quarter. The scheme has government support and therefore the risk involved is negligible.

Type of Account Single for people over 60 years old, retirees, or people 55-60 years old currently employed in a job; joint account permissible with only spouse
Maturity 5 years
Rate of Interest 7.6% p.a. paid every quarter on 31 March, 30 June, 30 September, and 31 December; interest auto-credit facility available to the investor’s account
Investment Minimum – Rs. 1,000; Maximum – upto Rs. 15 lakh allowed
Account Closing Closure allowed after 5 years of opening of the account; no interest payable if closure before 1 year since the date of opening, 1.5% deduction from principal amount for account closure between 1 and 2 years, 1% deduction between 2 and 5 years
Tax Exemption Tax deductions permissible for interest below Rs. 50,000 per annum under Section 80C of the ITA, 1961
Nominee Claim Permissible in case of death of the depositor before the scheme maturity; if joint account with spouse, account can continue upto maturity

Also Read: 6 Post Office Saving Schemes, Saving Plans for Boy Child in India 2022

Wrapping Up

As seen in the blog, there are a number of post office tax saving schemes for different sections of the society. You can choose your own best saving plan in India from these options as per your needs.

Found this post informational? Browse PayBima Blogs to read interesting posts related to Health Insurance, Car Insurance, Bike Insurance, Term Life Insurance and Investment section. You can visit PayBima to Buy Insurance Online.

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