Post office saving schemes in India

Post office saving schemes in IndiaPost office saving schemes in India

One of the safe and assured ways of getting fixed income is investing in post office saving schemes in India. In this article we would discuss about post office saving schemes in India and their features.

Post office saving schemes in India

Small saving schemes of Indian post office (backed by Govt. of India) has always been popular as they provide assured returns and capital is protected. Below are the post office schemes in India along with latest interest rates.

1) Public Provident fund:

  • Investment up to Rs 1,00,000 per annum qualifies for IT Rebate under section 80 C of IT Act.
  • Interest offered is 8.70% per annum. Interest rate would be decided by Govt. of India every year.
  • Loan facility available from 3rd financial year up to 5th financial year. The rate of interest charged on loan shall be 2% p.a.
  • Withdrawal permitted from 6th financial year.
  • Non-Resident Indians (NRIs) are not eligible.
  • An individual cannot invest on behalf of HUF (Hindu Undivided Family) or Association of persons.

2) 5 year Monthly Income scheme (MIS): Safe & assured returns who are looking for regular monthly income.

  • Good investment option who is looking for monthly fixed income
  • Rate of interest 8.40%.
  • Maturity Period – Five Years.
  • Auto credit facility to SB Account.

3) National Saving certificate: NSC’s are generally used for tax saving purpose and to get regular fixed income.

  • No maximum limit for investment.
  • No TDS, however income is taxable at maturity.
  • Premature withdrawal not available. However can be kept with banks as collateral security for loans
  • Investment up to INR 1,00,000/- per annum qualifies for IT Rebate under section 80C of IT act.
  • Available in 5 years and 10 years options. Rate of interest 8.50% p.a. and 8.80% p.a. respectively.

4) 5 year senior citizens saving schemes

  • Good and safe investment option for senior citizens.
  • The account may be opened by an individual, who has attained age of 60 years or above on the date of opening of the account.
  • Who has attained the age 55 years or more but less than 60 years and has retired under a Voluntary Retirement Scheme or a Special Voluntary Retirement Scheme on the date of opening of the account within three months from the date of retirement.
  • No age limit for the retired personnel of Defense services provided they fulfill other specified conditions.
  • The account may be opened in individual capacity or jointly with spouse.
  • NRIs and HUF are not eligible to open an account.
  • Maximum limit of Rs 15 lakhs
  • Premature withdrawal is available before three years with reduction in interest rates.
  • Premature closure allowed after three years without any deduction.
  • In case of death of the depositor before maturity, the account shall be closed and deposit refunded without any deduction along with interest.
  • Interest @ 9.20% per annum from the date of deposit on quarterly basis.
  • Nomination facility is available in the Scheme.
  • Investment under this qualifies for 80C IT benefits.

5) Time deposits:

  • Any individual (a single adult or two adults jointly) can open an account.
  • Time deposit available for 1 Year, 2 Year, 3 Year and 5 Year
  • In case of premature closure from 6 months to 1 year of deposit, simple interest would be paid. Beyond one year, interest would be paid at one percent less than the term deposit interest rates.
  • Rate of interest – 8.20%, 8.20%, 8.30%, 8.40% compounded quarterly for 1,2,3 & 5 years TD account respectively.
  • Investment of 5  year term deposit qualifies for 80C

6) Recurring deposit:

  • Any individual (a single adult or two adults jointly) can open an account.
  • Advance Deposits earn rebate.
  • Rate of interest 8.30%
  • Maturity value of a 5 Years RD account opened on or after 1.4.2013 with monthly deposit of INR.10/- shall be INR.744.53.
  • Part withdrawal facility available.
  • Premature closure allowed after three years.

7) Saving account:

  • Any individual can open an account.
  • Cheque facility available. 
  • Rate of interest 4% per annum

Readers, what is your opinion about these post office saving schemes in India? Please give your comments

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Post office saving schemes in India

Suresh KP


  • Sumedh

    Hi Suresh,

    Can you tell which is better i.e post office recurring or bank recurring deposits

    • Sumedh, There are two parameters which I would see 1) Safety: While banks are governed by RBI, there is less risk for investing in Bank RD. 2) Returns : Banks offer 8% to 9% and Post office offers 8.5% approx, hence Bank RD’s score high.

  • Hire

    Very good post, thanks alot.

  • Debojyoti Das

    Hi Suresh,

    You have covered everything for Post Office which Normal individual including me tends to neglect on a day-to-day life. Must say a great blog on Post office. Indeed, the safest of returns one can expect from Post-office and who does not have much knowledge on Shares, trading and MFs.

    best regards


  • Piyush

    Post office used to have longer term like >10 years deposits… what happened to those?

  • bemoneyaware

    Good summary .

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