Post Office Small Saving Schemes Interest rates-Oct-16 to Dec-16

Review of Post office Interest Rates for Oct-16 to Dec-2016Post Office Small Saving Schemes Interest rates – Oct-16 to Dec-2016

Couple of days back, the Ministry of Finance announced revised and latest interest rates for post office saving schemes applicable for the period Oct-2016 to Dec-2016 (3rd Quarter). For the past couple of quarters, Ministry of Finance is reducing interest rates gradually. In current quarter to Oct to Dec-2016, the interest rates are reduced to 0.1% compared to the previous quarter. What are the latest post office interest rates for Oct-2016 to Dec-2016? Are there any better investment options compared to revised post office saving scheme interest rates?

Post Office Small Saving Schemes Interest rates for Oct-16 to Dec-2016

Here is the quick snapshot about changes in post office interest rates.

1) All interest rates of post office saving scheme are reduced by 0.1% flat.

2) Post Office offers highest interest rates on Sukanya Samriddhi Account Scheme and Senior Citizens Saving Scheme at 8.5% per annum.

3) With compounding of interest rates by a quarter, term deposits and recurring deposits offer high interest rates per annum.

4) Post office term deposit offers 7.18% to 8.03% per annum from 1 to 5 years tenure. Currently many banks are offering around 7% to 7.75% per annum only. Hence Post office TD’s are best compared to bank FD’s.

5) With the reduced interest rates, investment in KVP is now doubled only after 112 months (compared to earlier 110 months). If you want to double your money, you need to deposit for at least 115 months in the bank. KVP is beneficial compared to bank FD schemes.

6) The Post Office MIS Scheme offers 7.7% per annum interest rates, which is payable every month. If you are a retired person, investing in post office monthly income scheme (POMIS) is one of the best way to get safe monthly income.

7) If you want to save money for your girl child and get higher returns, you can invest your money in Sukanya Samriddhi Account Scheme which offers  8.5% interest rates. The maturity amount is tax free.

8) If you want to invest your money for child education or for daughter marriage, you can consider investing in Public Provident Fund (PPF) which offers 8% interest. While the tenure is for 15 years, it offers highest tax free returns along with tax benefits u/s 80C.

9) If you are planning to save money every month, you can consider post office recurring deposit which offers up to 7.5% annualized returns.

10) If you are a low risk taker and planning to invest money to save tax,  NSC is one of the best option to invest.

Here are the Latest Post office Interest Rates for Oct-16 to Dec-2016

Revised and Latest Post office Interest Rates for Oct-16 to Dec-2016

Conclusion: Some of the Post office small saving schemes, offer the highest returns compared other saving schemes. Some of the popular schemes like PPF and Sukanya Samriddhi Yojana Scheme offers highest interest rates. If you are a low risk taker, consider investing in small saving schemes offered by the post office.

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Post Office Small Saving Schemes Interest rates for Oct-16 to Dec-2016

Suresh KP


  1. Hi Suresh,

    Very useful article indeed.

    In a recent update, the Prime Minister of India has said that senior citizens will receive a fixed interest rate of 8% for a period of 10 years (on deposits up to Rs. 7.5 lakhs). Does it mean that, it will be fixed throughout, or it will be modified periodically?

  2. Suresh, Can you please tell me how good it would be to invest in MIS and reinvest its interest in RD. What rate of interest will it fetch? Post tax calculations is it a better investment than a SCSS? Please revert.

  3. Sir.

       D/ B 07-09-1956. Pm 3000/- to 5 Yrs.(!st Jan 2017 to 31 Jan 2021) RD. At your POST  office. Any I Tax. I am Ex- Army. Reply Sir.

  4. Please refer the above chart for recurrung deposit the tenure mentioned is 1 to 10 years whereby I checked with my post office with postmaster that the tenure for recurring deposit is only for 5 years.Please rectify for the same.

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