A Complete Guide To Investment Schemes Available At The Post Office
One can access a range of banking services at a post office: from a savings bank account (Post Office Savings Account) to a fixed deposit (under the Post Office Time Deposit Savings Scheme). Under Government of India’s small savings schemes portfolio, the post office offers nine types of investment/deposit options. These are: Post Office Savings Account, National Savings Recurring Deposit Account, National Savings Time Deposit Account, National Savings Monthly Income Account, Senior Citizens Savings Scheme Account, Public Provident Fund Account, National Savings Certificates Account, Kisan Vikas Patra Account and Sukanya Samriddhi Account, according to India Post’s website – indiapost.gov.in. India Post operates a network of more than 1.5 lakh post offices across the country. India Post office also provides accounts under the National Pension System (NPS) (all citizens model), which is a voluntary pension scheme managed by the PFRDA or Pension Fund Regulatory and Development Authority.
Here are key details of the interest rates, lock-in periods and investment limits applicable to some of the banking services provided by India Post in designated post offices:
Post office savings account interest rates
Deposit in a post office savings account fetches interest at the rate of 4 per cent per annum, according to the India Post website.
Post office savings account investment/balance requirements
A Post Office Savings Account can be opened against a minimum deposit of Rs. 20. For a savings account without subscription to the post office’s cheque book facility, a minimum balance of Rs. 50 to ensure operability. For subscription to the cheque book facility, the savings account is to be opened with a minimum deposit of Rs. 500, and for this purpose, minimum balance of Rs. 500 is required to be maintained, according to the post office portal. India Post also provides internet banking services for its savings bank accounts.
Interest rates applicable to other small savings scheme in a post office
The nine savings schemes at the post office offer interest rates in the range of 7 per cent to 8.7 per cent.
|Savings scheme||Interest rate|
|Post Office Savings Account||4%|
|National Savings Recurring Deposit Account||7.30%|
|National Savings Time Deposit Account||7-7.8%|
|National Savings Monthly Income Account||7.30%|
|Senior Citizens Savings Scheme||8.70%|
|Public Provident Fund||8%|
|National Savings Certificates||8%|
|Kisan Vikas Patra||7.70%|
A comparison of lock-in periods and investment limits applicable to small savings scheme accounts in a post office
|Savings scheme||Maturity period||Investment limit|
|Post Office Savings Account||–||Minimum Rs. 20 for opening account|
|National Savings Recurring Deposit Account||5 years||Minimum Rs. 10 per month, no maximum limit|
|National Savings Time Deposit Account||1/2/3/5 years||Minimum Rs. 200, no maximum limit|
|National Savings Monthly Income Account||5 years||Rs. 1,500 – Rs. 4.5 lakh in single account/Rs. 9 lakh in joint account|
|Senior Citizens Savings Scheme||5 years||Rs. 1,000 – Rs. 15 lakh|
|Public Provident Fund||15 years||Rs. 500 – Rs. 1.5 lakh per financial year|
|National Savings Certificates||5 years||Minimum Rs. 100, no maximum limit|
|Kisan Vikas Patra||2.5 years||Minimum Rs. 1,000, no maximum limit|
|Sukanya Samriddhi||–||Rs. 1,000 – Rs. 1.5 lakh per financial year|
The savings schemes of Time Deposit, Recurring Deposit, Monthly Income, Senior Citizens, PPF, NSC and Kisan Vikas Patra come with a lock-in period – also known as maturity period – of one year to 15 years, according to the India Post website.
Post office certificate-based investment schemes
One can set up a variety of bank accounts at the post office. Out of the nine small savings schemes, Kisan Vikas Patra and National Savings Certificate (NSC) are certificate-based investment schemes.
Post office savings schemes income tax benefits
Investment in three of these small savings schemes offered by the post office is eligible for a deduction in taxable individual income up to Rs. 1.5 lakh in a financial year under Section 80C of the Income Tax Act. These post office schemes are: National Savings Time Deposit (five years), Public Provident Fund (15-year) and Senior Citizen Savings Scheme.
NPS account in a post office
National Pension System (NPS) enables the subscriber to set his or her own choice for fund allocation to different asset classes, such as government securities, equity market instruments, corporate debt and alternative investment funds.
Investment in NPS (all citizen model) is eligible for an additional tax benefit up to Rs.50,000 in a financial year, according to the post office website.