There are various types of deposit schemes called small savings schemes. The post office offers it for the people who want to invest in it. The USP provided by these schemes gives a guarantee that the central government owns it. Under section 80C of the Income-tax Act, some schemes offer tax-saving benefits as well. In this article, we will go through the Post office deposit schemes interest rates.
Post Office Interest Rates In India
There are various saving schemes offered by post offices in India. Since the central government guarantees it, it provides a firm base for its security. The tax exemption for all these schemes under Section 80C is up to Rs. 1,50,000.
Some of the various schemes provided by the post office include
- Public Provident Fund (PPF),
- Sukanya Samriddhi Yojana (SSY),
- National Saving Certificate (NSC),
- Post Office Time Deposit for a 5-year term, and
- Senior Citizen Savings Scheme.
Below is the table of interest rates provided under the small saving schemes-
The government reviews and fixes all the interest rates offered on these schemes. It’s carried out once in every quarter.
An Investment in the policies mentioned below within 3 months will close the pace for the plan’s total time period.
- Post Office Time Deposit,
- Post Office Recurring Deposit,
- Post Office Monthly Income Scheme,
- National Savings Certificate (NSC),
- Kisan Vikas Patra (KVP).
Yet, in the case of the Public Provident Fund (PPF) and Sukanya Samriddhi Yojana (SSY), the modified charge gets applicable in the respective quarter. The applicable rate changes from time to time.
1. For Senior Citizen- Senior Citizen Savings Scheme (SCSS)
In this scheme, the senior citizens aging 60 years or above go to earn an interest income. Thus, if you’re 60 or above, you can go for this option. Whatever interest you earn on deposits under this scheme is quarterly payable. The lock-in period is of 5 years for the principal amount. Yet, it’s allowed for premature withdrawal only on completion of one year. Apart from that, you also need to pay the penalty to withdraw before time.
Nowadays, you can invest a maximum amount of Rs. 15 lakh, as per this plan. You can get started by either handling it yourself or jointly with your better-half. If the total amount of money you deposit exceeds Rs. 1 lakh, it’s accepted in the cheque only. So, make sure you hold your checkbook with you for safety.
Section 80C also approves the following scheme for tax-break.
Interest Payable Rates Of SCSS
Interest rates from 01.04.2020 are as follows:-
7.4 % per annum, payable in the date of deposit, i.e., on 31st Mar or 30th Sept or 31st Dec for the first instance. Thereafter, interest would be payable on 30th Jun, 31st Mar,31st Dec, and 30th Sept.
Minimum And Maximum Amount Required To Retain
Unlike other schemes, it’s limited to only a single type of bank deposit. It’s carried out according to the factor of 1000x, i.e., it must be 1*1000 or 2*1000, etc.
Make sure that the maximum amount does not exceed Rs. 15 lakh.
Salient Features Of SCSS
i. If you’re aging 60 years or above, you can open an account.
ii. If you’re a person in the age group ranging from 55-60 years, stopped working, and surviving on retirement funds or under VRS, you can opt for such schemes. However, you can get started with your account within 1 month of getting your retirement funds. Added to that, the amount shouldn’t exceed the retirement benefits.
iii. Retired personnel from Defence Services can also open an account under this Scheme. However, there lies an age requirement of fifty years.
iv. The tenure period of this policy is restricted to 5 years.
v. You can either handle it yourself or with your better-half.
vi. You can start your account by providing physical money below Rs. 1 lakh and by the cheque of Rs.1 Lakh and above.
vii. The date of realization of the cheque in the Govt. account gets recognized as the date of opening of the account if you’ve opted for the form of a cheque. So, when you open your account, the date is the same as your date of realization of the cheque.
viii. The nomination facility is present at the time of opening of the account and also thereafter. So, even if you want to make any changes in your nomination, you can.
ix. You can shift your current account from one post office to a different one.
x. You can create one or multiple accounts. Yet, the total funds in it have to be within the chained limit. It’s clarified by adding balances altogether of all the accounts. For example, you opened 3 accounts. Your total balance is those 3 accounts will get calculated. It must be within the maximum range as specified.
xi. Joint accounts are often opened with spouse only. The first depositor in the joint account is that of the investor.
xii. Quarterly interest would be payable on the 1st working day of January, April, July, and October. You can avail of it in CBS Post Offices.
xiii. The premiums of SCSS gets calculated every 3-months.
You Can Seize Your Account Before Tenure In Case Of-
i. Suppose closed before 1 year of completion (no interest would be payable). If already paid, it would get recovered.
ii. On deduction of 1.5% of the deposit, i.e., to get deducted after one year.
iii. On deduction of 1% of the deposit, i.e., to get deducted after 2 years.
iv. Once your account tenure ends, you can again prolong its maturation for the next 3 years after a year. Thus, your accounts can get sealed after the tenure period of prolonged 1 year ends. Added to that, it holds no discount as well. However, you must handover an application for that.
v. If the interest fund is Rs. 50,000 on an annual basis, TDS debit takes place.
2. For Recurring Deposits- 5 Year Post Office Recurring Deposit Account (RD)
This is a much-preferred method for post offices compared to banks. The reason behind its popularity is it enables people to earn a healthy profit on maturity. Added to that, it also offers high-interest rates. These interest rates get revised with a Post Office RD (currently earning an interest of 5.8% p.a.) Since the interest gets compounded every quarter, it ensures that the total money gets multiplied by the time it matures.
Interest Payable Rates
Interest rates from 01.04.2020 are as follows:-
5.8 % once a year (quarterly compounded).
Minimum Cash That You Must Maintain In Your Account
The minimum limit lies at Rs. 100. Apart from that, you need to pay the amount in the multiples of Rs. 10. No maximum limit exists till now for you to retain.
Salient Features Including Tax Rebate For RD
i. Mentioned below is the list of categories which can open the account:
- An adult can open the account.
- Joint Account- It can include a max of 3 subscribers in it.
- A minor in the age group of 10 or above that but below 18.
- A guardian on behalf of a minor/Person with an unsound mind.
ii. You can create an account by providing money or cheque. In the cheque case, the date of the deposit is the date of the clearance of the cheque.
iii. The nomination facility is present at the time of opening and also thereafter.
iv. You can go for the seizing of the account after 3 years of your account opening. The interest applicable to the Post office bank account gets payable on the premature closure of the account.
v. Accounts can often get transferred from one post office to a different one.
vi. You can create more than one account in multiple post offices.
vii. If you created your account on the 15th of one month, you must submit your installment within the next month, dated 15th. If you’ve opened between the 16th day and the last working day of a month, it can get extended up to the last working day of the next month.
viii. If you fail to submit your monthly charges, you get enlisted as a defaulter. For every default, a renege charge of Re. 1 per 100 rupees gets imposed.
If the number of defaulters exceeds 4, you might lose your account.
ix. If there’s a monthly default amount in an RD account, the depositor must pay the defaulted monthly deposit with the default fee first. Then he must pay the present month’s deposit. This may apply to both CBS and non-CBS.
x. There is a rebate on advance deposit for a minimum of 6 installments, i.e., Rs. 10 for six months and Rs. 40 for 12 months. Rebate can get purchased in the denomination of Rs. 100.
xi. After attaining majority, a minor has to apply for conversion of the account on to his name.
xii. A loan of up to 50% of the balance gets allowed only after one year. It has to be repaid in one lump sum alongside interest at the prescribed rate.
xiii. A Safeguard Savings Plan gets relevant for an account of value Rs 100.
xiv. You can even carry out in online method by –
- Net banking
- Mobile Banking
- IPPB Savings Account
xv. The date of maturity is 5 years after the date of the account opening. However, you can even prolong it for another five years. It’s done by giving an application at the office where the account was initially created.
3. For Fixed Deposits
The Post Office Fixed Deposit Interest Rates are among the best and most popular rates for fixed deposits offered in India. Usually, in a post office FD, the interests get paid annually. But under this scheme, the interests get compounded quarterly.
In rural areas, Post Office FD is quite common as compared to urban areas. The minimum deposit acceptable under this scheme is Rs. 200, and there exists no such highest limit. However, you must make sure the amounts should be in the multiples of 200.
These schemes offer very high benefit returns on investment. Yet it depends upon the total period you selected for the plan, i.e., between a span of 1-5 years. However, any extra benefit is not allotted in this plan for the elderly section.
Below is a table that puts into light the interest you can earn as per your investment period-
Salient Features For Fixed Deposits
i. The post office fixed deposits tenure ranges from 1 year to five years.
ii. You’re free to create more than one FD accounts in multiple post offices.
iii. Children above 10 years are also free to create and manage their accounts. However, once they become adults, they must modify it as per the requisite measures.
iv. A min of Rs. 200 is mandatory for deposition to open a post office FD.
v. You’re also free to go for joint accounts. Yet, you must be two adults.
vi. Under Section 80C of India’s Tax Act, 1961, all the deposits made under this scheme for a tenure of 5 years are eligible for tax benefits.
vii. Post Office FD accounts can get shifted from one post office to a different one.
viii. The account gets renewed upon maturity for an equivalent period. However, the rate of interest gets apposite when the tenure ends.
ix. However, if you’re an NRI, I fear you may not get permitted to create an account in Post Office in India.
x. Nominations are often done at the time of account opening.
xi. You can create the account with both money and the cheque.
4. On Savings Account
You can also create a savings account in a Post Office. The minimum amount that you must is Rs. 20. However, there’s no upper limit for your investment in this plan.
If you don’t go for a cheque system, you must keep at least Rs—50 in your account. To avail of the cheque facility, the minimum balance you must maintain is Rs. 500. Under Section 80TTA of the Income Tax Act of 1961, a deduction of Rs. 10,000 p.a. takes place on the interest you gained from your entire savings account. It includes your post office savings interest as well.
Interest Payable Rate
The interest payable rate is 4.0% per annum on individual and joint accounts.
Minimum Amount That You Must Retain
You must deposit a minimum of Rs. 500 for the opening of an account. Here, there’s no such upper limit for the financing.
Salient Features Including Tax Rebate On Savings Account
i. Mentioned below is the list of people who can open an account-
- An adult.
- Joint Account- It can include a max of 2 adults.
- Children of the age group 10-18 years.
- In the case of a minor, a guardian must carry out all the procedures.
ii. Normally, people carry forward their accounts with either cash or in the form of a cheque.
iii. You must keep at least Rs—500 in your account. In case you don’t bear Rs. 500 is not maintained, a maintenance fee of Rs.100 gets deducted from the account. It’s deducted on the last working day of every fiscal year. After the deduction, if the balance in the account becomes nil, the account gets closed.
iv. There’s also an option of cheque/ATM provisions.
v. The cheque facilities are often granted in an existing account.
vi. The nomination facility is present at the time of opening and thereafter.
vii. You’re free to create only one account in one post office.
viii. You must make sure that you keep transacting from this account. In case you fail to carry out at least one transaction, it ceases to function normally.
ix. You can also make use of Intra operable net banking/mobile banking provision. You can shift your money by the process of net banking or through apps. The shift can take place between your savings accounts.
x. Provision to tie with IPPB Saving Account is there.
5. For Doubling the Money- Kisan Vikas Patra
The Post offices of India provide a certificate scheme called the Kisan Vikas Patra. It doubles a one-time investment within nearly 10 years and 4 months (if purchased after 1 Apr 2020).
Interest Payable Rates
Interest rates from 01.04.2020 are as follows:-
- 6.9% once a year (annually compounded).
- Invested amount doubles in 10 years and 4 months (124 months).
Minimum Amount For That You Must Retain
You must deposit a minimum amount of Rs.1000. The deposits must be in multiples of Rs. 100. Apart from that, there lies no upper extent of this investment.
Salient Features Including Tax Rebate Of KVP
i. Mentioned below is the categories that can open an account-
- An adult.
- Joint A Account that includes a max of three adults.
- Joint B Account- It too includes a max of 3 adults.
- Children in the age group of 10-18 years.
- In case you’re a minor, an adult guardian must standby at your place.
- In case the subscriber is mentally backward, a custodian must carry out the procedures.
ii. You can get hold of KVPs from any administrative store in the Post office.
iii. You can also create a nominee of your account.
iv. You can shift the certificates between individuals as well. Then, you can get it encashed after 2.5 years from the date when you got it registered.
6. Post Office Monthly Income Schemes (POMIS)
Under this scheme, you can enjoy monthly interest payments. A person can individually or jointly invest in this scheme. Minors who are aging 10 years or more can also invest in this scheme. This scheme runs for a tenure of 5 years.
You can avail of the premature withdrawal facility only after completion of one year. However, you can go for it by paying a certain penal amount.
Interest Payable Rates
6.6% per annum (monthly payable).
Minimum Money That You Must Maintain
To open an account, a minimum of Rs. 1500 you must deposit at first. The deposits must be in the multiples of Rs. 1000.
The following scheme has a maximum investment limit of Rs. 4.5 lakh, it’s created by you only, i.e., a single person and Rs. 9 lakh for a jointly created account. As per the Monthly Income Scheme (MIS), you can invest a maximum amount of Rs. 4.5 lakh, excluding your shares in a joint account.
Salient Features Including Tax Rebate Of POMIS
i. Mentioned below is the list of people who can open an account-
- An adult.
- Joint Account- It can allow a max of 3 subscribers.
- It’s open for minors only if the age exceeds 10 years.
- In case you’re a minor, your custodian must carry out the procedures.i
ii. You can open an account by cash/cheque. The date of realization in the government account is recognized as the date of opening the account when you go for the cheque method.
iii. The nomination facility is there at the time of opening and also thereafter.
iv. You can shift your account from one post office to a different one.
v. You can also create more than one account in a single Post Office. Yet, the maximum you can expand on this is the total balance in all your accounts, i.e., a max. of Rs. 4.5 Lakh.
vi. Account conversion can also take place. That is, you can alter it from an individual to a joint account.
vii. In case you’re below 18 years, once you turn adult, shift it in your name.
viii. The maturity period of the investments under this scheme is 5 years.
ix. All the interests obtained under this scheme get credited to your bank account at any CBS Post Office.
x. You can encash your cash get before maturity. It’s possible after 1 year of and before 3 years of investment. It’s credited with reducing 2% of the amount after a year and 1% of the amount after three years.
xi. You must pay all the Interests on completion of a month from the deposit date.
xii. If you’re unable to claim the interest payable monthly, these interests cease to earn any extra interest.
Next, let’s know how to get started with your own Post Office Savings Account. But before that, let’s have a look at what documents you must keep handy with you.
Documents Required For POMIS
- Probably the most important one is your recent photograph.
- Identity Evidence- It includes your Aadhar card, PAN card, etc.
- Residency Evidence- Telephonic bills, Electricity bills, etc.
Steps To Get Started With Your Own Post Office Savings Account Online
Mentioned below are the steps for you to start your own Post Office Savings Account-
i. You can ask the officials to provide you with the form. You need to fill it, providing all the correct information.
ii. With the form, you also need to provide your KYC information.
iii. As I have already said, you can either go with the cheque provision or without it. However, if you’re going with the cheque provision, you need to provide Rs. 500. Yet, if you don’t bear the cheque, you can submit Rs. 20.
iv. After all this, you can get your account within 2 working days.
Look at the table below for more knowledge about interests gained-
Accessing Post Office Account Online
Earlier, there wasn’t any accessibility of the transaction from Post Office accounts online. However, recently there was an improvisation made to mark this folly. So, you can either go for-
- Net banking, or
- App operation
However, for easy operation, make sure you bear your personal net banking account. In the present scenario, net banking is utmost required to make transactions online. You can easily transfer the requisite amount from one account to another, just sitting on your sofa, from any corner of the world.
Mentioned below are the steps for you to make your accessibility easier-
1. Net Banking Method
Go to the authentic site of Indian Post Internet Banking- https://ebanking.indiapost.gov.in/
There, you’ll find an option showing ‘Navigate Accounts’. Click on it.
Next, go to the option showing ‘Balance N Transactions.’
Then, if that is your savings account, click on it.
There, you’ll find a box showing ‘My Transactions.’ Click and print it.
2. App Method
As we all are habituated these days to smartphone apps, I guess you’ll find this method easier.
So, go through the steps below for easy navigation.
Provide your credentials and login to your authenticate account.
Tap on ‘My Accounts.’
Since that is your savings account, tap on it.
Then search for the option ‘Transaction History’ and click on it.
There, you can find an option to download and print it later.
We’re not yet done with you! Here you go some of the Frequently Asked Questions (FAQs). These will help you clear all your remaining doubts.
1. Which is the best scheme in a post office?
Every single scheme listed here is the best of the best. It completely depends on what kind of benefit you want to make for yourself. All the schemes are best on their own grounds. So, you must choose wisely which scheme suits you the most.
2. In how many years will an FD double in a post office?
Your investment to double in a Post Office FD would require 124 months (10 years and 4 months).
3. How do I invest in the Post Office Monthly Income Scheme (POMIS)?
If you’re aging 10 years and above, you’re eligible to open an account under POMIS. To open an account, you must deposit a minimum of Rs. 1500 at first. The maximum investment limit is Rs. 4.5 lakh for an individual account, and a joint account, it’s Rs. 9 lakh.
4. Can I withdraw money from any Post Office?
Yes, certainly you can. If you have an account, you can withdraw money from any Post Office, but with a withdrawal limit of Rs. 10,000 per transaction.
India Post also allows you to transfer your savings account from one Post Office branch to another.
5. How can I withdraw from my Post Office account in the offline method?
You can either withdraw your money offline or by online procedures. For the offline procedure, carry yourself your passbook to the post office where you’ve opened your account. If you created a savings account, you could easily get it transferred to your account, asking the authority officials. They might need your ATM card or the checkbook or passbook. In case you don’t bear the concerned ATM card with you, just carry with yourself your passbook. For safety, keep a scanned photocopy of your identity proof as well.
However, if it’s not savings but some other account, you need to draft an application with the passbook. In it, you need to mention the account you need the amount to get transferred.
6. Can I check my Post Office account online?
Currently, there’s no facility to access your savings account online. Yet, you can apply for an online banking account in your Post Office.
You can check the amount by the provision of SMS. There’s also a free calling number 0330 828 0881, where you can know the total amount in your account.
7. Is Post Office Investment safe and tax-free?
Yes, investments in a Post Office are completely safe and secure as they bear a sovereign guarantee of the Govt. of India. Almost all the policies framed provide a discount on the tariff. However, it’s accepted up to a certain extent. Some schemes also provide tax benefits on returns.
8. Is there any Post Office scheme for students?
Yes, there is. Not just one, but many. Nearly all the schemes of a Post office allow students aged 10 years or above to make investments. Students must make sure that they choose a scheme, which is the most beneficial to them in the present and the future.
9. How can I open an account in the post office, and what are the requirements?
To open an account under Savings Bank (SB), Recurring Deposit (RD), Monthly Income Scheme (MIS), Time Deposit (TD) in a post office, SB103 (pay-in-slip), SB3, and specimen signature slip for Saving Bank and Time Deposit are required. The senior citizens have separate forms mentioned. However, an introduction is compulsory.
10. What is the late payment fee for recurring deposits?
You must deposit the monthly installments on any day of the month. But if the money isn’t deposited for any particular month, you get enlisted in a defaulter list. You can deposit the money for Rs. 10 denomination, and 0.20 paise for each defaulter month. You can get the exemption of a max of 4 defaulted. So, make sure you don’t get enlisted in one.
11. How much can I withdraw from my Post office account?
According to the India Post website, a Post Office can allow a withdrawal amount of Rs. 25,000 per day using it’s ATM card. However, the barrier to the extraction limit lies at Rs. 10,000 per transaction.
All in all, Post Offices do provide a lot of facilities to people like banks of these days, do. In this generation, many people aren’t even aware of all these benefits provided by post offices. Post Offices provide various deposit schemes for people who want to invest. So, by now, you must have become familiar with all the schemes mentioned above and how beneficial they are to us all. Thus, if you haven’t purchased any scheme yet, grab one right away.
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