A complete guide on post office saving schemes

As we know that all the post offices are working under the department of posts. A lot of post offices are providing a postal service to the public. Before some years ago post offices are known as DAKGHAR that deliver letters from one place to another place. After the implementation of new technology, post offices are providing many postal services like saving schemes, Aadhar services, e-commerce, philately, etc. These schemes are called post office saving schemes.

Due to the clean image of the post offices, people still want to invest their valuable money in different types of saving schemes of the post offices. Every post office provides these savings schemes across India.

Type of post office saving schemes

 Presently, the department of posts provides a total of 9 postal saving schemes which are explained in detail as below.

Five year Post Office RD Account scheme

It is a small savings scheme that provides a periodic monthly deposit for five years. Poor people can invest in this type of postal scheme. You can open many RD accounts to invest your money every month in the post offices. For more details please read the ultimate guide on Recurring Account scheme 2020

Post Office Savings Account​​​

The post office provides a facility to open a savings account like banks. It can be opened in any of the post offices across India. You can open a single or joint account by the deposit of cash only.

You have to maintain a minimum balance of 500/- in the POSB account. If minimum balance is not maintained, a maintenance fee of 100/- shall be deducted from the account. 

The post office also provides ATM and cheque facility to their customers for the savings account. You can also link this POSB account with the IPPB account. After linking to the IPPB account, you can also manage your POSB account from IPPB Mobile application by using sweep in or sweep out options. 

Post office TD Account Scheme

It is a similar scheme of the Fixed Deposit scheme. You can deposit for one year to five years in the Time Deposit scheme of post offices. Interest shall be payable annually and it may be credited to the savings account of the account holder at his option.

Salient features of TD account

  1. Time Deposit account may be opened by an individual.
  2. Any number of accounts can be opened in any post office.
  3. A joint account can be opened by two adults only.
  4. Interest payable annually but calculated quarterly.
  5. 2, 3, and the 5-year account can be closed after 1 year at discount, Account can also be closed after six months but before one year with interest at post office saving accounts.

​Public Provident Fund Account ​

PPF scheme is the most popular scheme among people. PPF account can be opened in banks as well as in post offices. It has 15 years lock-in period. You can deposit your valuable money in a lump sum or in installment up to 1,50,000 Rs. in a financial year. You have to must deposit a minimum amount in your PPF account.

An online deposit facility is also available through IPPB mobile application. Public Provident Fund scheme is a tax-free scheme. No need to submit/deposit income tax on the PPF maturity amount.

Salient Features of PPF account

  1. An individual can open a PPF account with a minimum amount and a maximum amount of Rs. 1,50,000 in a financial year.
  2. A joint account can not be opened.
  3. The subscriber can open another PPF account in the name of minors but subject to maximum investment limit by adding balance in all PPF accounts.
  4. The maturity period is 15 years but it can be extended within one year of maturity for a further 5 years and so on.
  5. Premature closure can not be allowed before 15 years.
  6. Deposit qualify for deduction from income tax under Sec. 80C of IT Act.
  7. Interest is completely tax-free.
  8. Withdrawal is permissible every year from the 7th financial year from the year of opening the PPF account.
  9. The loan facility is available from the 3rd financial year.
  10. No attachment under the count decree order.

​Sukanya Samriddhi Account Scheme

It is also the most popular scheme under the India Post office saving scheme. Parents who have a girl child can open an SSA account in post offices. The age of girl children should be less than 10 years. You can also take a rebate in income tax for the deposit amount in the Sukanya account

You can deposit up to 1,50,000 Rs. in a single SSA account in a financial year. The deposit amount may be in a lump sum or in installment. 

An online deposit facility is also available like a PPF scheme. You can deposit money into the Sukanya account through IPPB mobile application. Normal premature closure of the SSA account will be allowed on the occasion of girl marriage after the completion of 18 years.

Salient features of SSA account

  1. A legal guardian/natural guardian can open an SSA account in the name of a girl child.
  2. A guardian can open only one account in the name of one girl child and a maximum of two accounts in the name of two different girl children.
  3. The account can be closed after completion of 21 years of the girl child.
  4. If the account is not closed after maturity, balance will continue to earn interest as specified for the scheme from time to time.
  5. Normal premature closure will be allowed after completion of 15 years of the girl child/provided that girl is married.
  6. Partial withdrawal, maximum up to 50% of balance standing at the end of the preceding financial year can be taken after Account holder's attaining age of 18 years.

Senior Citizen Savings Scheme 

It is a post office saving schemes for senior citizens only. People who are 60 years old in age or more may open senior citizen savings account in the post office. The maturity period for this scheme is five years only. A retired person who is 55 years old but less than 50 years can also open an SCSS account.
It is the best source of income for senior citizens person to get regular income.

Kishan Vikas Patra (KVP)

In this India Post office saving scheme, you have to purchase a KVP certificate. The invested amount in the KVP certificates doubles after a prescribed period. You can purchase a KVP certificate from any of the post offices across India. It matures in 124 days.

National Savings Certificates 

It is also the best investment option for a salaried person because the invested amount by purchasing NSC certificates gives a rebate in the income tax under the 80 C section. You have to purchase NSC certificates from any of the post offices. The invested amount doubles after a prescribed period. 

National Saving Monthly Income Account (MIS)

It is also reliable saving schemes of the post office which allows investing a maximum of Rs. 4.5 individually and Rs. 9 lakh jointly. The maturity period of this scheme is 5 years.    

Interest can be drawn through auto credit into savings account standing at the same post office,or ECS./In case of MIS accounts standing at CBS Post offices, monthly interest can be credited into savings account standing at any CBS Post offices.

Salient Features of MIS account scheme

  1. The account may be opened by an individual.
  2. A joint account can be opened by two or three adults.
  3. Any number of accounts can be opened in any post office subject to a maximum investment limit by adding balance in all accounts.
  4. A bonus of 5% on principal amount is admissible on maturity in respect of MIS accounts opened on or after 08.12.2007 and up to 30.11.2011. No bonus is payable on the deposits made on or after 01.12.2011.
  5. Can be premature en-cashed after one year but before 3 years at the discount of 2% of the deposit and after years at the discount of 1% of the deposit. (Discount means deductions from the deposit)

How to open an account in any of the post office savings schemes

If you want to open an account in any of the postal schemes, then you have to follow the below steps.

01. Visit your nearest post office

First of all, you have to visit your nearest post office and get a prescribed account opening the application form.

02.  Deposit minimum amount along with duly filled form  

After the filing of the above account opening form for the required post office scheme, you have to deposit a minimum amount along with the duly filled form, passport size photographs, and KVC documents like Aadhar card, Pan Card, etc.

03. Get passbook or certificate  

The Counter PA of a post office will open a required account in the system and gives you a passbook or certificate (NS/KVP). You can deposit your valuable money in the future by using a passbook in any of the post offices across India.

The benefit of investing in the post office savings scheme

There are many benefits to investing in any of the post office savings schemes. These are explained in detailed as under: -

01. Safe and risk-free investment

People know that all post offices are working under the central government department which is also reliable among people for the last many years. Hence people do not habitats by investing their money in the postal schemes. PPF and Sukanya are the most popular schemes. 

02. The withdrawal facility is available at any post office

All post offices are connected with a single central server after the implementation of CBS. 
You can withdrawal your money from savings account (POSB) in any of the post offices across India.


03. Rebate in income tax

Some of the India post office savings scheme gives rebate in income tax under 80 C section i.e. PPF, Sukanya Samridhi Yojana, etc.

What are interest rates in various post office savings scheme in 2020

Although the interest rate keeps changing as per the direction of the Government, I am giving information about the interest rate going on in the year 2020 here. You may check the latest interest rates of the post office savings scheme.

Name of the scheme--->             Interest Rate
01. POSB account--->4.0 (Annually)
02. One year to There Year TD account---> 5.5 (Quarterly)
03. Five year TD account---> 6.7 (Quarterly)
04. Five year RD account---> 5.8 (Quarterly)
05. Senior Citizen Savings Scheme---> 7.4 (Quarterly)
06. MIS scheme---> 6.6 (Monthly)
07. NSC---> 6.8 (Annually)
08. KVP --->6.9 (Annually)
09. PPF Scheme---> 7.1 (Annually) 
10. Sukanya Samridhi Yojana---> 7.6 (Annually) 

A complete guide on post office saving schemes