Post Office Savings Schemes are those financially secured instruments through which the government offers people throughout India safe investment options. Originated in 1854 under the British rule as part of Indian Post Office, the Indian Post Office evolved into banking services. Thus, such schemes are highly recommended for those whose investments require secure and fixed returns on their investment, thereby making Post Office Savings Schemes a very attractive choice to secure finances.
What is a Post Office Saving Scheme?
Post Office Savings Scheme refers to a variety of saving instruments that are offered by the Indian post office. These schemes are basically risk-free return-generating schemes wherein one can open up a savings account at any post office across India.
Interest rates offered here are mostly higher compared with banks. Deposits can be either fixed or recurring. These plans are especially useful as they operate under the observation of the central government that makes this investment relatively more secure for investors.
Types of Post Office Savings Schemes and Rate of Interest
Post Office Savings Account (SB)
This is as if a saving account in a regular bank but at an interest rate of 4%. One can also get accounts for minors. Under this scheme, investments up to ₹10,000 are tax-free, and it is free of any maximum investment amount.
National Savings Recurring Deposit Account (RD)
This plan lets an individual pay as low as ₹ 100 per month and also offers a rate of interest of 5.8% p.a. The plan operates for five years, though withdrawal after three years of deposits is allowed.
TD: National Savings Time Deposit Account
This fixed deposit account has a minimum deposit of ₹ 1000. The interest rate differs from 5.5% to 6.7% as a function of tenor, and tenor can be from one to five years.
MIS: National Saving Monthly Income Account
This scheme is highly demanded to gain regular returns over the investment. It comprises a rate of 6.6% with an initial deposit as low as ₹ 1000. The amount that can be invested lies at ₹4.5 lakhs, and in a joint account, ₹ 9 lakhs is the maximum amount.
Senior Citizens Savings Scheme Account (SCSS)
It is meant for more than 60 people, SCSS has an interest rate of 7.4%. Its minimum deposit is ₹1000 and maximum ₹15 lakhs.
Public Provident Fund Account (PPF)
Its interest rate is 7.1%, it’s a long-term investment. The minimum deposit at this is ₹500 and one may deposit up to ₹1.5 lakhs per year.
Sukanya Samriddhi Account (SSA)
It promotes savings for girl children and carries an interest rate of 7.6%. Families can deposit in the range of ₹250 to ₹1.5 lakhs every year.
NSC
NSCs are a five-year product with an interest rate of 6.8%. Investment for ₹1000 is allowed, and there is no upper limit.
Kisan Vikas Patra (KVP)
This scheme can be opened with a minimum deposit of ₹1000 and the interest rate is of 6.9%. KVP accounts can be closed prematurely after completion of 2.5 years
PM CARES for Children Scheme
Under this scheme, children who lost both parents to Corona receive ₹10 lakhs from PM CARES fund, besides a monthly benefits.
Benefits of Post Office Savings Schemes
There are so many benefits of Post Office Savings Schemes. The schemes come with government guarantees, and as such, they are highly secure. Therefore, conservative investors can rely on them for savings. Higher accessibility of post offices located in rural and remote areas makes it possible for even the most marginalized sections of the population to participate in the schemes.
Moreover, most schemes require low minimum deposits, thus allowing a very wide section of people to join the scheme. Finally, most of the accounts allow for joint holding, can be transferred between post offices, and some even provide ATM/debit cards for easy use.