Ruchi SrivastavaIn a world filled with investment options ranging from risky markets to secure savings plans, Post Office savings schemes have consistently been a favored choice for risk-averse investors. Backed by the Government of India, these schemes provide a sense of security along with reasonable returns.
Conservative investors prefer safe investment options that protect their capital while providing fixed returns. In addition to the traditional choice of fixed deposits, retail investors often consider small savings schemes, commonly referred to as post office savings schemes. These products offer interest rates ranging from 4% to 8.2% annually. The lowest rate of 4% is provided by a post office savings account, while the highest rate of 8.2% is available through the Sukanya Samriddhi Account. In this blog, we will help you know which of the top 10 post office schemes could help investors accumulate great returns.
Here’s an overview of nine post office schemes that provide interest rates exceeding 7% (percent).
Top Post Office Schemes that offer above 7% Interest Rate
| Instruments | Rate of interest w.e.f 01.04.2024 to 30.06.2024 | Compounding Frequency |
| 3-Year Time Deposit | 7.1 (Annual Interest ₹719 for ₹10,000/-) | Quarterly |
| 5-Year Time Deposit | 7.5 (Annual Interest ₹771 for ₹10,000/-) | Quarterly |
| Senior Citizen Savings Scheme | 8.2 (Quarterly Interest ₹205 for ₹10,000/-) | Quarterly and Paid |
| Monthly Income Account | 7.4 (Monthly Interest ₹62 for ₹10,000/-) | Monthly and Paid |
| National Savings Certificate (VIII Issue) | 7.7 (Maturity Value ₹14,490 for ₹10,000/-) | Annually |
| Public Provident Fund Scheme | 7.1 | Annually |
| Kisan Vikas Patra | 7.5 (will mature in 115 months) | Annually |
| Mahila Samman Savings Certificate | 7.5 (Maturity Value ₹11,602 for ₹10,000/-) | Quarterly |
| Sukanya Samriddhi Account Scheme | 8.2 | Annually |
1. Senior Citizens Savings Scheme
The Senior Citizen Savings Scheme (SCSS) offers an 8.2% interest rate, provided by the government. The minimum deposit is Rs. 1,000, in multiples of Rs. 1,000, with a maximum limit of Rs. 30 lakh in all SCSS accounts owned by an individual. If the combined interest from all SCSS accounts exceeds Rs. 50,000 in a financial year, the interest becomes taxable, and TDS will be deducted at the applicable rate. However, no TDS will be deducted if forms 15G/15H are submitted.
2. Public Provident Fund Scheme
The Public Provident Fund (PPF) Scheme offers a 7.1% annual interest rate, compounded yearly, provided by the government. The minimum deposit required is Rs. 500 per fiscal year, with a maximum limit of Rs. 1.50 lakh. Contributions can be made in any number of payments throughout the fiscal year, in multiples of Rs. 50, up to the maximum of Rs. 1.50 lakh. The interest is calculated based on the account’s lowest balance during the calendar month.
3. Five–Year Post-Office Time Deposit
The 5-Year Post Office Time Deposit (TD) scheme offers a competitive interest rate of 7.5% on a 5-year term deposit, making it an attractive option for conservative investors seeking stable returns. One of the key advantages of the 5-year TD is that it qualifies for tax benefits under Section 80C of the Income Tax Act, of 1961. This means that investments in this scheme not only provide a reliable source of income but also help in reducing taxable income, offering dual benefits of security and tax savings.
4. Post Monthly Income Schemes
The government provides a 7.4% interest rate on the Post Office Monthly Income Scheme (POMIS). The Investor can open an account with a minimum amount of Rs. 1,000, with additional deposits made in multiples of Rs. 1,000. The maximum deposit allowed is Rs. 9 lakh for a single account and Rs. 15 lakh for a joint account. The total deposits in all MIS accounts held by an individual cannot exceed Rs. 9 lakh.
5. Three-Year Post Office Time Deposit
The 3-Year Post Office Time Deposit (TD) scheme offers an interest rate of 7.1% for a 3-year term deposit. Here the investor can open their Accounts with a minimum deposit of Rs. 1,000, with additional contributions made in multiples of Rs. 100. There is no upper limit on the amount that can be invested in this scheme, making it flexible for individuals seeking secure returns over the medium term.
6. National Savings Certificate
The National Savings Certificate (NSC) offers a 7.7% interest rate, compounded annually and paid upon maturity. A minimum deposit of Rs. 1,000 is required, with additional investments in multiples of Rs. 100, and there is no upper limit on how much you can invest. Deposits made under this scheme are eligible for tax deductions under Section 80C of the Income Tax Act. The investment reaches maturity five years from the date of deposit, making it a secure option for medium-term savings.
7. Mahila Samman Savings Certificate
The Mahila Samman Savings Certificate offers an annual interest rate of 7.5%, with interest compounded quarterly and credited to the account. This interest is paid out when the account is closed. This certificate can be availed either by a woman for herself or by a guardian on behalf of a minor girl.
8. Kisan Vikas Patra
The Kisan Vikas Patra (KVP) offers an annual interest rate of 7.5%, compounded yearly. The investment amount will double in 115 months, which is equivalent to 9 years and 7 months. The deposit will mature according to the time frame set by the Ministry of Finance, as applicable on the date of deposit.
9. Sukanya Samriddhi Account Scheme
The Sukanya Samriddhi Account Scheme offers an annual interest rate of 8.2%, calculated and compounded yearly. The minimum deposit required is Rs. 250, with a maximum of Rs. 1,50,000 allowed per financial year. Multiple deposits can be made in by the deposition of Rs. 50, and there are no limits on the number of deposits made within a month or financial year.
Conclusion
Post Office schemes are an ideal option for conservative investors who prioritize safety and reliability in their investments. Supported by the Government of India, these schemes offer security, guaranteed returns, and, in certain cases, tax advantages. Whether you’re a senior citizen needing a steady income or a young professional aiming for long-term financial stability, there is a Post Office scheme designed to meet your specific needs.
Source: economic times, cleartax
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