Post office is one of the major banking service providers in India. It is owned and managed by the Indian government. The fact that the Department of Posts offers several investment schemes for all genres of people is the reason why most people especially senior citizens and retirees prefer post office schemes over other investment avenues. If you’re also planning to invest in post office schemes, here’s a sneak peek into the details of everything you want to know about the post office schemes.
Different Types of Post Office Saving Schemes
1. Post Office Savings Account: - The post office savings account is opened only by the cash deposit of a minimum of Rs 500/-. To keep the account active, at least one transaction each of deposit and withdrawal has to be made using this account in three financial years. The deposit and withdrawal of money in the post office savings account can be done through electronic mode at the core-banking (CBS) post offices. An account holder can transfer their PO savings account from one post office to another as and when required. To avail the cheque facility, maintaining a minimum balance of Rs.500/- in the account is a must. However, minimum balance to be maintained is a non-cheque facility account is Rs 50/-.
2. Sukanya Samridhi Yojana: - This scheme is for better rearing and bright future of your daughter. The Sukanya Samridhi Yojana scheme can be taken for your girl child of up to 10 years of age. Parents of a twin-girl child can open a maximum of 2 accounts under this scheme. The minimum of Rs.1000/- can be deposited in this scheme and it may exceed a maximum of Rs 1, 50,000/- per year. Legal guardian or parents can open the account in the name of the girl child. Sukanya Samridhi Yojana scheme can be closed after completion of 21 years. One can even opt for a normal premature closure of the account after completion of 18 years however the girl should be married by then.
3. Senior Citizens Savings Scheme (SCSS): - Any individual aged over 60 years of age can open this account. Plus, retirees on superannuation or under VRS can also enroll in for this scheme provided the account is opened before the completion of one month of the receipt of retirement. The maturity period of SCSS is 5 years and one can run more than one senior citizens savings account both singly and jointly with their husband or wife.
4. Kisan Vikas Patra: - It is a savings certificate scheme launched by the Department of Posts in the year 1988. As part of the scheme, an individual can purchase the certificate also known as the Kisan Vikas Patra for himself or on behalf of a minor from any departmental post office. The Kisan Vikas Patra can be transferred from person to the other and from one post office to the other conveniently. Also, it can be en-cashed after one and a half year or two from the date it has been issued.
5. National Savings Certificate: - This scheme is specially designed for government employees, entrepreneurs and other salaried individuals who are taxpaying citizens of the country. Though there is no maximum limit on the purchase of National Savings Certificates, an investment of up to 1.5 lakh is tax-free u/s 80C of Income Tax Act.
In addition to this, other prominent post office savings schemes include Post Office Time Deposit Account, Post Office Monthly Income Deposit Account, 5-year Post Office Monthly Recurring Deposit and the most common Public Provident Fund (PPF) scheme.
The interest rates on Post Office Savings Scheme
To help you know more about the post office savings scheme, the table below highlights the interest rates of different post office saving scheme:-
Post Office Schemes |
Applicable interest rates |
Rate of compounding |
Post office savings account |
4.00% |
Quarterly |
Sukanya Samridhi Yojana |
8.1%(with effect from 1-01-2018) |
Annually |
Kisan Vikas Patra |
7.3%(with effect from 1-01-2018) |
Annually |
National Savings Certificate |
7.6%(with effect from 1-01-2018) |
Annually |
Post office monthly income scheme account |
7.3%(with effect from 1-01-2018) |
Annually |
15-year Public Provident Fund |
7.6%(with effect from 1-01-2018) |
Annually |
Senior Citizens Savings Scheme (SCSS) |
8.3%(with effect from 1-07-2018) |
Quarterly |
1 Year Post Office Time Deposit |
6.6%(with effect from 1-01-2018) |
Quarterly |
2 Year Post Office Time Deposit |
6.7%(with effect from 1-01-2018) |
Quarterly |
3 Year Post Office Time Deposit |
6.9%(with effect from 1-01-2018) |
Quarterly |
5 Year Post Office Time Deposit |
7.4%(with effect from 1-01-2018) |
Quarterly |
The Bottom Line
It is an incongruity that most people in India are not aware of such government-based savings schemes offered by the Department of Post and, thus continues to invest in bank fixed deposits and other related schemes. It may also come as a surprise to many that post office savings scheme constitutes of more than 6lac crore balance in its savings scheme deposits, which is almost half of what the biggest public sector bank SBI holds and twice the deposits ICICI – the largest private sector bank holds in India.
With its unparalleled reach, post offices cover almost every part of the country with 95 percent pin code coverage. Furthermore, a post office primarily covers a large part of rural areas where there are no banks so far. The process to apply for post office savings scheme is simple and can be useful for the investors in the long run. In addition to this, India Post offers insurance schemes as well and with a huge array of savings schemes that truly transforms it into a financial giant with the best in class reach, brand and saving schemes that Indians trust. Credibility is also not a problem here because the Department of Posts of fully controlled and managed by the Government of India that makes umpteen efforts to make your post office saving experience highly valuable and of use.
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