Post Office Savings Scheme India: Explained -

Post Office Savings Scheme India: Explained

The Postal Department of India, the administrator of the postal network in India, besides providing services such as collection, sorting, and distribution of letters and parcels, also offers several schemes for the general Indian public. These schemes are called post office savings scheme India.

These schemes aim to provide investment methods for the people of India. These savings schemes are available in every post office in India to help individuals from all over India apply and enroll easily. 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 nine types of saving schemes for the general public. These post office savings scheme India are as under:

Public Provident Fund (PPF)

PPF is a post office savings scheme for a long-term investment with a lock-in period of 15 years. You can earn a handsome interest rate and returns on the invested amount. The interest earned on the investment of PPF is tax-free under income tax section 80C. After five years of opening the PPF account, a partial withdrawal option is available.

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 any national bank, such as the State Bank of India (SBI) or Punjab National Bank (PNB). Thus you can open an account at a post office or bank.

Post Office Monthly Income Scheme (POMIS)

POMIS is another post office savings scheme India backed by the government. A small savings scheme allows investors to save a specific amount every month. As a single, you can invest Rs. 4.5 lakh, and in a joint account, holders can invest Rs. 9 lakhs.

Interest on the invested amount is added according to applicable interest rates and paid to the investor every month. The investment period for the scheme is five years.

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

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 opening an account under this scheme. NSC encourages small to mid-income subscribers to invest in this scheme as a saving bond plan. The NSC provides tax savings under section 80C of income tax law. 

7.9% is the interest rate 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. The scheme is available only for individual Indian nationals. Hence Trust and Hindu Undivided Families cannot buy NSC. Besides, NRIs (Non-Indian Residents) are not eligible to invest in NSC.

Sukanya Samriddhi Yojona

Sukhanya Samriddhi Yojana (SSY) is one of India’s post office savings schemes 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 ten.

One family can open only two accounts in the name of their two daughters. Parents of a girl child can open an SSY account with an initial amount of R. 250/-, and Rs. 1, 50,000/- is the highest amount they can invest in a year.

Parents or guardians can open an SSY account at any post office or 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 account’s opening date, deposits are to be made for 15 years. After 18 years account holder can avail of the facility of partial withdrawals.

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 plan is five years from the account opening date, but you can extend it once by an additional three years.

The interest rate from April 2020 to June 2020 for SCSS is 7.4%. This interest rate is the highest in India among various small savings schemes.

You can open an SCSS account through any Post Office or 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 eligible to invest in SCSS.

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

Post Office Savings Account

This is another post office savings scheme India. A post office saving account is like a savings account that one opens in a bank. You can open this account at any post office with the least 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. This scheme is very beneficial for rural residents of India because the post office reach is throughout India compared to banks. It is a benefit-providing scheme for individuals looking to earn a fixed interest rate on their deposits.

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

Post Office Recurring Deposit Account 

Post office recurring deposit account plan facilitates you to save for five years monthly, meaning 60 monthly installments. Applicable interest rates are earned by the investments under this scheme and are calculated quarterly.

It is a good savings plan for individuals with regular monthly income who wants to increase their savings with the help of regular monthly deposits in this scheme of a fixed amount for a specific time. Five years are the minimum tenure for the post office RD account.

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

Post Office Time Deposit Account

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

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

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

Kisan Vikas Patra Scheme (KVP)

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

The maturity period of the scheme is ten years and four months (124 months), i.e., the invested amount will be doubled in 10 years and four 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.

In the initial stage, this scheme was only for the farmers 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.


The postal department provides these post office savings schemes in India 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 with a tax deduction under section 80C of the income tax law. Interest rates and maturity are not the same for all these schemes, but these schemes guarantee handsome returns.


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