Find your suitable insurance plan
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12 min read
Updated on Feb 13, 2024
A large population in our country lives in rural areas where financial planning isn’t really a priority. To encourage this section of 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 best post office schemes 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 Indian post office tax savings schemes.
Table of Contents Show
The post office savings plan includes investment instruments that provide a variety of reliable and risk-free returns. There are numerous ways to open a savings account at a post office in India. These provide appealing fixed interest rates and fixed deposit policies that are set or recurring.
Below are some benefits of investing in Post Office Savings Schemes:
| 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 |
| 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 | 6.7% 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 |
Also Read: Post office RD online payment
| Eligibility | Single adult, Joint (up to 3 adults allowed), minor (guardian can open on behalf of minor), and independent minor a/c over 10 years old |
| Maturity | 1-year, 2-year, 3-year, 5-year |
| Rate of Interest | Starts at 6.9% (Max. 7.5%) |
| Investment Amount | Min. Rs 1000 and multiples of 100.
No Max. amount |
| Premature withdrawal | Minimum six months from the date of deposit |
| Tax Exemption | Investments made in five-year accounts qualify for tax deductions under Section 80C of the Income Tax |
| Risk Involved | Risk -free |
| Eligibility | Single adult, Joint (up to 3 adults allowed), minor (guardian can open on behalf of minor), and independent minor a/c over 10 years old |
| Maturity | 5 years |
| Rate of Interest | 7.4% |
| Investment Amount | Min. Rs 1000 and multiples of 1000
Max. Rs. 9 lakhs (single account), Rs. 15 lakhs (joint account) |
| Premature withdrawal | Minimum 1 year from the date of deposit |
| Tax Exemption | Interest earned is taxable
No deduction is available under Sec 80C for deposits made |
| Risk Involved | low -risk |
The 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 | 8.2% 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: LIC senior citizen scheme
| Eligibility | Single adult (resident Indian), a guardian can open on behalf of a minor or a mentally unsound person |
| Maturity | 15 years |
| Rate of Interest | 7.1% |
| Investment Amount | Min. Rs 500.
Max. Rs. 1.5 lakh per year |
| Premature withdrawal | Any time after the expiry of five years of the account |
| Tax Exemption | Tax exemption of up to Rs. 1.5 lakh in a FY u/s 80C of the Income Tax |
| Risk Involved | low -risk |
Considered the best policy for girl child, the Sukanya Samriddhi Account or SSA is backed with government support particularly for girl child in India. This post office tax 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 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 | 8% 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 |
Also Read: Sukanya samriddhi yojana interest rate 2024
This is another very popular scheme that is designed to offer income tax benefits to both salaried professionals and businessmen. The main feature of NSC is that it has no maximum investment limit. Check out the other features below:
| Eligibility | Single adult, Joint account (up to 3 persons) a guardian can open on behalf of a minor or a mentally unsound person, independent minor account over 10 years of age |
| Maturity | 5 years |
| Rate of Interest | 7.75% |
| Investment Amount | Min. Rs 1000 and multiples of 100
No Max. limit |
| Premature withdrawal | Not before five years (on certain conditions) |
| Tax Exemption | Tax exemption of up to Rs. 1.5 lakh in a FY u/s 80C of the Income Tax |
| Risk Involved | low -risk |
KVP is a risk-free and fixed-rate small savings plan that allows the investor to save and accumulate wealth over time without any worry. Here are some features:
| Eligibility | Single adult, Joint account (up to 3 persons) a guardian can open on behalf of a minor or a mentally unsound person, independent minor account over 10 years of age |
| Maturity | 9 years and 7 months (Maturity period is decided by the Ministry of Finance from time to time) |
| Rate of Interest | 7.5% |
| Investment Amount | Min. Rs 1000 and multiples of 100
No Max. limit |
| Premature withdrawal | Can be closed under certain conditions |
| Tax Exemption | KVP is taxable upon maturity. There is no tax benefit under this scheme. |
| Risk Involved | low -risk |
| Eligibility | By a woman for herself, by a guardian on behalf of a minor girl |
| Maturity | Two years from the date of opening the account |
| Rate of Interest | 7.5% |
| Investment Amount | Min. Rs 1000 and multiples of 100
Max. limit is Rs. 2 lakhs |
| Premature withdrawal | On the death of the account holder
On extreme cases |
| Tax Exemption | No tax benefit under this scheme |
| Risk Involved | Risk-free |
Checkout the below table, representing the 10 best Post Office Saving Schemes and their respective Interest Rates 2024:
| Sr. No. | Post Office Savings Schemes | Interest Rates Annually |
| 1 | Post Office Savings Account | 4% |
| 2 | National Savings Recurring Deposit Account | 6.7% |
| 3 | National Savings Time Deposit Account | Starts at 6.9% (Max. 7.5%) |
| 4 | National Savings Monthly Income Account | 7.4% |
| 5 | Senior Citizens Savings Scheme Account | 8.2% |
| 6 | Public Provident Fund Account | 7.1% |
| 7 | Sukanya Samriddhi Account | 8% |
| 8 | National Savings Certificates (VIIIth Issue) | 7.75% |
| 9 | Kisan Vikas Patra | 7.5% |
| 10 | Mahila Samman Savings Certificate | 7.5% |
Below are the easy steps to apply for post office savings schemes:
Below are the required documents needed to open a post-office savings scheme in India:
Wrapping Up
As seen in the blog, there are a number of post office tax saving schemes for different sections of society. You can choose your own best post office saving scheme in India from these options as per your needs.
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A low-risk strategy with consistent income is the Post Office Monthly Income Scheme. Earn 7.4% interest on monthly investments up to Rs. 9 lakh and Rs. 15 lakh made in a joint account. Each person must have a MIS account in order to invest in a post office scheme.
Yes, cash may be withdrawn from any post office using a Post Office account. The money can also be withdrawn at any time by the account holder. However, in the case of a generic account, a minimum balance of Rs. 500 must be kept.
A maximum of Rs. 10,000 in cash may be taken out of the post office account each day. However, a daily withdrawal limit of Rs. 25000 is allowed when using a post office ATM card.
Yes, Indian Post Office offers its account holders the option of using the internet banking service to access their specific account information, among other things. A valid individual or joint account, KYC documents, and an active DOP ATM card are required for customers before they can register for net banking.
Students older than 18 can participate in all programmes with the exception of the Senior Citizen Savings Programme. The Sukanya Samriddhi Yojna (SSY) is a programme for female students that requires parents to deposit a minimum amount or more. Once the money has grown, it is given to the girl child when she turns 21.
Indeed, it is protected as ventures under Mailing station bear sovereign assurance of Administration of India. This large number of plans are charge excluded up to a specific breaking point and a few plans like PPF, Sukanya Samridhi Yojna have tax reductions on returns too.
PayBima Team
PayBima is an Indian insurance aggregator on a mission to make insurance simple for people. PayBima is the Digital arm of the already established and trusted Mahindra Insurance Brokers Ltd., a reputed name in the insurance broking industry with 17 years of experience. PayBima promises you the easy-to-access online platform to buy insurance policies, and also extend their unrelented assistance with all your policy related queries and services.
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