Postal Investment

Post Office Investments include a number of saving schemes that provide a high rate of interest as well as tax benefits and most importantly, carry the sovereign guarantee of Indian Government. Read on to know about various Post office savings schemes along with the interest rates, key features and benefits, tenure of deposit, etc.

all the post office investment schemes are tax-exempt under Section 80C, i.e. tax exemption up to Rs. 1,50,000 is allowed. Some small saving schemes offered by Post Office are Public Provident Fund (PPF), Sukanya Samriddhi Yojana (SSY), National Savings Certificate (NSC), Post Office Time Deposit for a 5 Year Term, and Senior Citizen Savings Scheme (SCSS).

Investing in Post Office Time Deposit, Post Office Recurring Deposit, Post Office Monthly Income Scheme, National Savings Certificate (NSC) and Kisan Vikas Patra (KVP) in a given quarter will carry the rate in that quarter for the lock-in entire tenure of the savings scheme.

For Public Provident Fund (PPF) and Sukanya Samriddhi Yojana, the revised rate will be applicable in the concerned quarter and so on.

Small Savings Scheme	Interest Rate	Tenure	Tax Deduction on Investment?	Interest Taxable
Post Office Savings Account	4.0%	NA	No	Yes
Post Office Recurring Deposit	5.8%	5 Years	No	Yes
Post Office Monthly Income Scheme	6.6%	5 Years	No	Yes
Post Office Time Deposit (1 year)	5.5%	1 Years	No	Yes
Post Office Time Deposit (2 year)	5.5%	2 Years	No	Yes
Post Office Time Deposit (3 year)	5.5%	3 Years	No	Yes
Post Office Time Deposit (5 year)	6.7%	5 Years	Yes	Yes
Kisan Vikas Patra (KVP)	6.9%	30 Months Lock-in period	No	Yes
Public Provident Fund (PPF)	7.1%	15 Years	Yes	No
Sukanya Samriddhi Yojana	7.6%	25 Years	Yes	No
National Savings Certificate	6.8%	5 Years	Yes	No
Senior Citizens Savings Scheme	7.4%	5 Years	Yes	Yes

Please note that interest rates are reviewed every quarter by the Government for these schemes. Investing in Post Office Time Deposit, Post Office Recurring Deposit, Post Office Monthly Income Scheme, National Savings Certificate (NSC) and Kisan Vikas Patra (KVP) in a given quarter will lock-in the rate in that quarter for the entire tenure of the savings scheme. However, for Public Provident Fund (PPF) and Sukanya Samriddhi Yojana, the revised rate will be applicable in the concerned quarter and so on. In other words, the applicable rate keeps changing.

Post Office Savings Account

• This account is like a savings account with a bank, except that it is held with a post office.
• Only one account can be opened with one post office and can be transferred from one post office to another.
• You can also open an account in the name of a minor. The interest rate is 4% and is fully taxable. However, no TDS is deducted on the same.
• Under the non-cheque facility, the minimum balance which is required to be maintained is Rs.50/-
• However a deduction of Rs 10,000 per annum is available on your total savings account interest including post office savings interest under Section 80TTA of the Income Tax Act, 1961.