9 min read
Updated on May 13, 2023
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 post office tax savings schemes.
Checkout the below table, representing the 10 best Post Office Saving Schemes and their respective Interest Rates 2023:
|Sr. No.||Post Office Savings Schemes||Interest Rates Annually|
|1||Post Office Savings Account||7%|
|2||National Savings Recurring Deposit Account||3.25% – 8.00%|
|3||National Savings Time Deposit Account||7.50%|
|4||National Savings Monthly Income Account||7.40%|
|5||Senior Citizens Savings Scheme Account||8.20%|
|6||Public Provident Fund Account||7.10%|
|7||Sukanya Samriddhi Account||7.60%|
|8||National Savings Certificates (VIIIth Issue)||7.70%|
|9||Kisan Vikas Patra||7.50%|
|10||PM CARES for Children Scheme||N/A|
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|
|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
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|
|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|
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|
|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|
Also Read: Sukanya samriddhi yojana interest rate 2023
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|
|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: LIC senior citizen scheme
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 saving plan 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.
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