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Post Office Savings Scheme India: Explained

The Postal Department of India, administrator of the postal network in India, apart from providing services such as collection, sorting, and distribution of letters, parcels, etc., also provides several schemes for the general Indian public. These schemes are called Post Office Savings Scheme India.

The purpose of these schemes is to provide investment methods for the people of India. These saving schemes are available in every post office in India to help individuals from all over India to apply and enroll with ease. These schemes offer interest rates ranging from 4% to 8.1%.

Besides decent annual returns, some of these plans also offer tax benefits under section 80C of the income tax law. So investing in these schemes is a reliable way to earn good returns on the money invested in these schemes.

Types of Post Office saving schemes

The postal department of India currently provides 9 types of saving schemes for the general public these post office savings scheme India are as under:

1. Public Provident Fund (PPF)

PPF scheme is a long-term investment plan with a lock-in period of 15 years. You can earn a handsome interest rate and returns on the invested amount. The interest earned under the scheme is tax-free under the income tax section 80C. A partial withdrawal option is available after 5 years of the opening of the PPF account.

To keep an account active you have to deposit at least Rs. 500/- every year.

You can open an account under this scheme in a Post Office or in any national bank such as State Bank of India (SBI) or Punjab National Bank (PNB). Thus you can open an account at a post office or in the banks.

2. Post Office Monthly Income Scheme (POMIS)

POMIS is a small savings government-backed scheme that allows an investor to save a specific amount every month. As a single, you can invest Rs. 4.5 lakh and in joint account two or more persons can invest Rs. 9 lakhs. The investment period for the scheme is 5 years. Interest on the invested amount is added according to applicable interest rates and paid to the investor on monthly basis.

Any Indian resident can invest in this scheme. POMIS is not available for NRIs. The age for the investor must be at least 10 years or above. No tax benefits are provided by the scheme, payouts of monthly interest are taxable. But on the interest amount, no TDS (Tax Deduction at Source) is charged.

3. National Savings Certificate (NSC)

An initiative of the government of India National Saving Certificate is a fixed income and secure investment plan. You can get NSC from any post office by open an account under this scheme. As a saving bond plan, it encourages small to mid-income subscribers to invest in this scheme. The NSC provides tax savings under section 80C of income tax law. 

7.9% is the interest rates on the certificate which the certificate earns yearly. Government revises interest rates quarterly. Thus the certificate guarantees you a regular income.

Government promotes National Saving Certificate as an individual saving scheme. Hence Trust and Hindu Undivided Families cannot buy NSC. Besides NRIs (Non-Indian Residents) are not eligible to invest in NSC. The scheme is available only for individual Indian nationals.

4. Sukanya Samriddhi Yojona

Sukhanya Samriddhi Yojana (SSY) is one of the post office savings scheme in India, and is a government-supported scheme for girl children as a Beti Bachao Beti Padhao initiative. Parents or Guardians of the girl can open an SSY account on behalf of their child. The account can be opened in the girl child’s name before she turns 10 years.

One family can open only two accounts in the name of their two daughters. The account can be opened with an initial amount of R. 250/-, and Rs. 1, 50,000/- is the highest amount that you can invest in a year.

You can open an SSY account at any post office or any designated private or public sector bank. The maturity period for the account is 21 years or until the girl marries after 18 years.

The scheme provides tax benefits under section 80C of income tax law. From the opening date of the account, deposits are to be made for 15 years. After 18 years account holder can avail of the facility of partial withdrawals.

5. Senior Citizen Savings Scheme

The government-backed Senior Citizens Savings Scheme (SCSS) is a savings scheme available to residents of India who are above 60 years. The maturity period for the scheme is 5 years from the account opening date; but, you can extend it once by an extra 3 years.

The interest rates from April 2020 to June 2020 for SCSS are paid @ 7.4%. In India, this interest rate is the highest among various small savings schemes.

You can open an SCSS account through any Post Office or through a participating private or public sector bank. Being a government-supported saving plan applicable terms and conditions to the Senior Citizens Savings Scheme are the same regardless of the Post Office or bank through which you are investing.

Hindu undivided families and NRIs (Non-Indian Residents) are not allowed to invest in SCSS.

Also Read: Post Office Online Banking India: What You Need to

6. Post Office Savings Account

A post office saving account is like a savings account that one opens in a bank. You can open this type of account at any post office with the least amount of Rs. 20/- It is necessary to maintain at least Rs. 50/- in the account. The post office also facilitates you to transfer money online in your post office savings account.

You can earn a fixed interest on the deposits of the account. It is a benefit providing scheme for those individuals who are looking to earn a fixed interest rate on their deposits. This scheme is very beneficial for rural residents of India because the post office reach is throughout India as compared to banks.

To open the account one must be an Indian citizen, if a minor wants to open a post office saving account he/she must be 10 years old. A joint account can also be opened in the name of two or three persons.

7. 5-Year Post Office Recurring Deposit Account

5-Years post office recurring deposit account plan facilitates you to save for 5 years on a monthly basis that means 60 monthly installments. Applicable interest rates are earned by the investments under this scheme and are calculated on a quarterly basis.

It is a good savings plan for individuals with regular monthly income and wants to increase their savings with the help of regular monthly deposits in this scheme of a fixed amount for a certain period of time. 5 years are the least tenure for the post office RD account.

The post office RD scheme is a good savings plan for the individuals, investing for the first time, and for the young educated persons who can invest in installments. The scheme provides good returns at the time of maturity. So invest in this scheme can give you good returns.

8. Post Office Time Deposit Account

This time deposit account is one of the well-known post office savings schemes in India. Though the time deposit plan is open to all individual Indian citizens this scheme is popular especially in remote and rural areas of the country where the people have limited reach to banks and have less access to investment opportunities.

The tenure for the post office time deposit account is 1, 2, 3, or 5 years. A minor who is above 10 years of age can invest in this plan the scheme under section 80C of income tax law offers tax benefits.

On behalf of minors parents or guardians can open a time deposit account in their name non-Indian residents (NRIs) are not allowed to open a post office time deposit account.

9. Kisan Vikas Patra Scheme (KVP)

Kisan Vikas Patra Scheme (KVP) was introduced by the postal department in 1988 for the farmers of the country. The primary goal of the plan is to encourage people for long-term financial discipline.

The maturity period of the scheme is 10 years and 4 months (124 months) i.e. the invested amount will be doubled in 10 years and 4 months from the purchase date of the certificate. You can invest at least Rs. 1000-00 and no upper limit is set for the scheme.

At the initial stage, this scheme was only for the farmers to enable them to save for the future but now this plan is available to every citizen of India. Currently, the certificate offers an interest rate of 6.9% per year. You have to pay taxes on the returns of the scheme.

Kisan Vikas Patra has three types of certificates which are (1) Single Holder Type Certificate (2) Joint ‘A’ Type Certificate and (3) Joint ‘B’ Type Certificate.


These post office savings scheme in India are provided by the postal department for the benefit of the general public of India. These schemes generate good returns for investors who wish to save for the future.

These schemes also provide you a tax deduction under section 80C of the income tax law. For all these schemes interest rates and maturity is not the same but these schemes guarantee handsome returns.


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