Post Office Saving Schemes are government-backed investment options offered through India Post. They cater to different needs—short-term saving, steady income, long-term growth, and tax-saving options.
Main Types of Schemes
- Savings Account
- Interest Rate: ~4% p.a.
- Minimum ₹500, no lock-in.
- Recurring Deposit (RD)
- 5-year tenure, interest ~6.7% compounded quarterly.
- Min ₹100/month.
- Time Deposit (TD/Fixed Deposit)
- Tenures of 1–5 years, rates range 6.9%‑7.5%.
- Min ₹1,000.
- Monthly Income Scheme (MIS)
- 5-year term, ~7.4% interest paid monthly.
- Investment upto ₹9 lakh (individual), ₹15 lakh (joint).
- Senior Citizen Savings Scheme (SCSS)
- 5-year term, ~8.2% interest (paid quarterly).
- Max investment ₹30 lakh.
- Public Provident Fund (PPF)
- 15-year lock-in, ~7.1% interest tax-free.
- Min ₹500, max ₹1.5 lakh/year.
- Sukanya Samriddhi Yojana (SSY)
- Girl child savings; ~8.0‑8.2%, 21-year maturity.
- National Savings Certificate (NSC)
- 5-year scheme, ~7.7% interest, earns tax benefits.
- Kisan Vikas Patra (KVP)
- Doubles investments in ~10.3 years; ~7.5% interest.
- Mahila Samman Savings Certificate
- Women-specific, 2-year term, ~7.5%, up to ₹2 lakh.
Benefits
- High safety: backed by the Government of India.
- Competitive rates: some exceed bank FD rates.
- Diverse options: for liquidity, income, long-term goals.
- Wide reach: accessible across rural and urban India.
Tax Implications
- Scheme Deposits:
- Eligible for Section 80C deductions (up to ₹1.5 lakh/year): RD, TD (5-year), PPF, NSC, SSY, SCSS.
- Interest Taxability:
- Savings Account: Interest up to ₹7,000 (joint) or ₹3,500 (single) is exempt under Section 10(15) even in new tax regime.
- Other schemes: Interest is taxable as per slab, though PPF, SSY, NSC (on maturity), and SCSS may enjoy EEE or partial EET tax treatment.
- TDS: Deducted if interest exceeds ₹40,000/year (₹50,000 for senior citizens).
Summary Table
| Scheme | Tenure | Rate (%) | Lock-in | Section 80C | Tax Treatment |
|---|---|---|---|---|---|
| SB Account | — | ~4.0 | None | No | ₹7k exemption; rest taxable |
| RD | 5 yrs | ~6.7 | 5 yrs | Yes | Interest taxable |
| TD | 1–5 yrs | 6.9–7.5 | 1–5 yrs | 5 yrs only | Interest taxable |
| MIS | 5 yrs | ~7.4 | 5 yrs | No | Taxable |
| SCSS | 5 yrs | ~8.2 | 5 yrs | Yes | Interest taxable |
| PPF | 15 yrs | ~7.1 | 15 yrs | Yes | EEE – fully tax-free |
| SSY | 21 yrs | ~8.0–8.2 | 21 yrs | Yes | EEE |
| NSC | 5 yrs | ~7.7 | 5 yrs | Yes | EEE on maturity |
| KVP | ~10.3 yrs | ~7.5 | — | No | Taxable on maturity |
| Mahila Scheme | 2 yrs | ~7.5 | 2 yrs | Yes | Depends; generally taxable |
Final Takeaway
Post Office Schemes offer a safe, accessible, and often tax-efficient way to invest. Choose based on your needs—liquidity, income, long-term growth, or tax savings. While interest is taxable except in select EEE schemes, you still gain from high government-backed returns compared to many bank products.
