Post Office Saving Schemes 2021

Post Office Saving Schemes: Interest rate, Types, Benefits & Tax Exemptions 2022

Finance Investment

Last Updated on 26/02/2022 by Deepak Singla

Post Office Schemes include an array of great investment options that offer amazing interest rates like SSA, NSC, PPF, SCSS, and so on. And most of these schemes are eligible for tax benefits up to a maximum of INR 1.5 lakhs as per Section 80C. The best part is that when you invest in these schemes, the interest rate held in that quarter will be held for the rest of the investment tenure.

However, some schemes like PPF and SSY will follow the quarterly revised rates. This article covers all the Post Office Savings Scheme details, their types, benefits, and other things about them that you need to know.

Post Office Savings Schemes

Post Office Savings Schemes comprise various reliable investment products offered by the Indian Post Office that offer guaranteed returns. You can gain access to such a scheme through more than 1.5 lakh post offices located all across the country. For instance, you must be familiar with the Public Provident Fund, aka, PPF. It is provided by all post-offices in India in addition to 8200 PSU branches.

Types of Post Office Savings Scheme

Several interesting plans form a part of the Post Office Saving Schemes. Find them listed below with all important details:

Sl. No. Scheme Name Interest Rate Minimum Investment Maximum Investment Tenure Eligibility Tax Implications
1. Post Office Savings Account 4% p.a. INR 20 No limit ·         Individual

·         2 adults (joint account)

·         Guardian on behalf of a minor or a person with mental illness

·         Minor above 10 yrs of age

Interest is tax-free up to INR 50,000
2. Post Office Time Deposit Account 1st yr: 5.5% p.a.

2nd yr: 5.5% p.a.

3rd yr: 5.5% p.a.

4th yr: 6.7% p.a.

INR 200 No limit 1 yr, 2 yrs, 3 yrs, 5 yrs ·         Up to 3 individuals (joint account

·         Individual

·         Guardian on behalf of a minor or a person with mental illness

·         Minor above 10 yrs of age

Tax benefits for 5 years on deposits made as per Section 80C
3. Post Office Monthly Investment Scheme 6.6% INR 1,500 Single account: INR 4.5 lakhs

Joint account: INR 9 lakhs

5 years ·         Up to 3 individuals (joint account

·         Individual

·         Guardian on behalf of a minor or a person with mental illness

·         Minor above 10 yrs of age

Interest on investment is taxable and no deduction for deposits towards the scheme.
4. Post Office Recurring Deposit 5.8% p.a. INR 100 No limit 5 years ·         Up to 3 individuals (joint account

·         Individual

·         Guardian on behalf of a minor or a person with mental illness

·         Minor above 10 yrs of age

Taxable as per the investor’s tax slab
5. Senior Citizen Savings Scheme (SCSS) 7.4% INR 1,000 INR 15 lakhs 5 years (could be extended by 3 more yrs) ·         Individual aged more than 60 yrs

·         Retired Civilian Employees (55 yrs < age < 60 yrs)

·         Retired Defense Employees (50 yrs < age < 60 yrs)

·         Single account or joint account

Tax exemption on deposits

TDS deducted if the interest earned exceeds INR 50,000 p.a.

6. Public Provident Fund (PPF) 7.1% INR 500 (per FY) INR 1.5 lakhs (per FY) 15 years ·         Resident Indian

·         Adult

·         Guardian on behalf of a minor or a person with an unsound mind

·         Retired Defense employee (50 years < age < 60 years)

Tax rebate on deposits up to a maximum of INR 1.5 lakh p.a. as per Section 80C
7. National Savings Certificate (NSC) 6.8% p.a. INR 100 No upper limit 5 years ·         Guardian on behalf of a minor or a mentally ill person

·         Minor above 10 years of age

Tax exemption as per Section 80C (max. up to INR 1.5 lakh p.a.)
8. Kisan Vikas Patra (KVP) 6.9% p.a INR 1,000 No limit Decided by the Ministry of Finance from time to time ·         Individual, 3 people together, guardian on behalf of a minor or a person with an unsound mind

·         Minor older than 10 years

Maturity amount is tax-exempt but interest is taxable
9. Sukanya Samriddhi Account (SSA) 7.6% p.a. INR 1,000 (per FY) INR 1.5 lakhs (per FY) 21 yrs or when the girl gets married/ when she attains 18 years of age ·         Guardian on behalf of the girl child aged less than 10 years


Maturity amount, interest earned, and investment up to INR 1.5 lakhs are tax exempt as per Section 80C

1.     Post Office Savings Account

The Post Office Savings Account operates in the same way as all the bank savings accounts. But, the difference here is that the Savings Account is held with a Post Office and not a bank. Also, if you have opened an account at a post office but are moving to a different location, then you can transfer your account. The rate of interest you get with a Post Office Savings Account is 4% and it is taxable too.

2.     Post Office Time Deposit Account (TD)

A Post Office Time Deposit scheme gives you a lot of flexibility with tenures. And the interest rate varies as per the investment duration:

Investment Period Interest Rate
1 year 5.5%
2 years 5.5%
3 years 5.5%
5 years 6.7%

The minimum sum you can invest in a Time Deposit Account is INR 200 and there is no maximum limit to it. Also, you can have as many accounts as you want with this scheme. You can have a joint account as well and transfer your account to another post office.

This scheme does come with tax benefits under Section 80C of the IT Act, but only if you stay invested for 5 years. Also, when the plan matures, your investment will get renewed automatically for a similar tenure.

3.     Recurring Deposit (RD)

The recurring deposit scheme could be thought of as a Post Office monthly saving scheme. But, unlike other financial institutions, you have to stay invested in a Post Office Recurring Deposit for 5 years. The current interest rate of a Post Office RD is 5.8% p.a. and it gets compounded quarterly.

You can make a minimum investment of INR 100 per month in an RD. And the amount should be in the multiples of 10. Also, there is no upper limit to the amount you can invest in a 5-year Post Office Recurring Deposit.

4.     Public Provident Fund (PPF)

PPF is an investment option you would take up if you wanted a long-term investment plan. It is considered as one of the best saving schemes in Post Office. The tenure of this scheme stretches out to 15 years. And presently it offers an interest rate of 7.1% per annum that compounds yearly.

The minimum investment you can make here is INR 500 and the maximum is INR 1,50,000 in a fiscal year. Also, you can make the investment in a lump sum or via installments. PPF can be extended up to 5 years after it matures.

You also get a premature closing facility with PPF and that comes after 5 years in cases of serious diseases or higher education. It also allows partial withdrawals after you have stayed invested in it for 5 years and you can get a loan against your PPF as well.

5.     Monthly Income Scheme (MIS)

This is a great initiative by the Post Office Savings Scheme that acts as an alternate monthly income source. You can earn an interest rate of 6.6% p.a. on an MIS and it has a tenure of 5 years. Both minors and adults can have their MIS accounts opened. And in case a minor is above 10 years of age, then they can operate the account too.

6.     Senior Citizen Savings Scheme (SCSS)

The Post Office Senior Citizen Saving Scheme is for senior citizens only. You can buy it if you are 60 years or older. But, in case you have taken up voluntary retirement after you are 55 years old, then also, you can open a Senior Citizen Savings Scheme in Post Office. You can invest in this scheme either individually or with your spouse.

The upper investment limit is INR 15 lakhs and you can invest in multiples of INR 1000. Currently, the interest rate provided by this scheme is 7.4% per year and you can also withdraw it prematurely after 1 year, provided you pay a penalty of 1.5%. But, if you withdraw after 2 years, then the penalty would be 1%.

Upon maturity, you can further extend this account for 3 more years. And you also get tax benefits as per Section 80C of the IT Act under this scheme. But, the interest amount is subjected to TDS if it exceeds the INR 10,000 mark.

7.     Sukanya Samriddhi Account (SSA)

The Sukanya Samriddhi Account aims to provide better education and facilities to girl children. The rate of interest of this plan is 7.6% p.a. and the minimum amount you can invest here is INR 250 and the maximum is INR 150,000. You can also make lump sum deposits and you can make as many deposits as you want to in a month or year.

This is the exclusive Post Office Saving scheme for girl child. It has a tenure of at least 15 years and the deposits you make towards the plan are eligible for tax exemptions as per Section 80C of the IT Act. Besides, the interests earned on this account along with the maturity amount, are tax-free.

8.     National Savings Certificate (NSC)

National Savings Certificate (NSC) provides an interest rate of 6.8% p.a. that is compounded half-yearly but is paid out only at the time of maturity. The minimum amount you can invest in NSC is INR 1000. And the maturity period of the National Savings Certificate (NSC) 5 years.

Both adults and minors are eligible to get an NSC certificate. But, the guardian has to get the NSC on behalf of the child. Also, the amount you contribute towards this investment is eligible for tax deductions according to Section 80C of the IT Act. Lastly, you can have your NSC to another person during its tenure.

9.     Kisan Vikas Patra (KVP)

Kisan Vikas Patra has an interest rate of 6.9% and it is compounded yearly. The minimum amount you can invest in it is INR 1000 and there is no upper limit. Your investment will double in 10 years and 4 months. It can be bought at any Post Office in India and you also get the facility to transfer it whenever you want to.

You can encash the investment only after 2.5 years of staying invested. The only drawback is that this scheme does not provide you with any tax benefits. The interest earned on a KVP is also completely taxable.

Benefits of Post Office Savings Scheme

1.     Simple Investment

There is no hassle involved when it comes to buying a Post Office Savings Scheme. Besides being easy to get enrolled in, these are easy to track and maintain too. And it is ensured that both rural and urban investors will feel comfortable investing here. Also, not much documentation is required to start investing.

2.     Good for Long Term Goals

Post Office Savings Schemes are really good when it comes to long term financial goals. And the reason being that these are safe investments backed by the Government. Other long-term investments like stocks always have some risk associated but PO Savings schemes don’t. Schemes like PPF have an investment tenure of 15 years and that is a great way to build some wealth over the long-term.

3.     Interest Rates

Usually, the Post Office Savings interest rates vary between 4% – 9% and that is a good range to look for while investing. Also, this is a fixed interest rate decided by the Government. So, the interest rate at the time of you enrolling in a scheme remains fixed for your entire investment tenure. With certain other investment schemes such as mutual funds, the interest rate fluctuates with the market condition.

4.     Risk-Free

As mentioned earlier, Post Office Investments are backed by the Government and so they are free from risks. So, rest assured because you’ll get guaranteed returns with almost every Post Office Saving Scheme.

5.     Tax Benefits

You get tax rebates on almost all the Post Office Saving Schemes, as per Section 80C of the IT Act. Usually, the tax benefits are provided on the amount you deposit into your investment. But, some schemes like the Sukanya Samriddhi Yojana, PPF, SCSS, etc. will also provide tax exemption on the interest you earn.

6.     Wide Range of Options

The Post Office Saving Schemes provide you with a number of different types of schemes that you can buy as per your needs.

Who Should Consider Investing in Post Office Saving Schemes?

Individuals who prefer a risk-free investment portfolio should go for Post Office Investments. Moreover, these also provide stable returns to help grow your wealth. Some of the best Post Office Saving Schemes that have negligible risks are PPF, Sukanya Samriddhi Yojana, NSC, etc.

These schemes also come at great interest rates. And the minimum investment needed is pretty low. All these factors make the Post Office schemes very luring for all economic groups of the society.

Eligibility Criteria to Invest in Post Office Saving Schemes

In order to invest in a Post Office Savings Scheme, you need to open a Post Office Savings Account first. And to do the same, you need to meet certain eligibility criteria.

Following individuals/group of people are eligible to open a Post Office Savings Account:

  • Minors at least 10 years of age
  • A guardian on the child’s behalf
  • A mentally ill person can also own a PO Savings Account.
  • 2 or 3 people could have a joint account together
  • Group Accounts and Institutional Accounts are not allowed. Other accounts that are not permissible include Security Deposits Accounts and Official Capacity Accounts

How to Invest in Post Office Saving Schemes: Step-By-Step Guide

Like we’ve already mentioned, investing in a Post Office Saving Scheme is very easy. Given below are the steps that tell you how to open a Post Office Savings Account:

Step 1. First, you need to visit the nearest Post Office branch where you want to invest. The branch could be the one you prefer and not necessarily the nearest one.

Step 2. Then, ask for a Post Office account opening form for the scheme you want to invest in. Otherwise, you can also choose to download the account opening form from the Indian Post official website.

Step 3. Duly fill in the form with all the proper information. Then, you need to submit it along with your KYC and other required documents like photo, ID proof, address proof, etc.

Step 4. Once submitted, you have to deposit the investment sum for your selected post office savings scheme. And with that, your enrolment is completed.


Q1. Can a single Post Office account be transformed into a joint account?

Ans. Yes, you can do that. You can shift your single account into a joint one or convert a joint account into a single account. But, not all Post Office savings plans might allow it.

Q2. Can I take a look at my Post Office account online?

Ans. Yes, you can. For this, you need to register yourself for net banking with the Indian Post Office regardless of whether you hold a single or a joint account. You have to provide your KYC documents as well along with a DOP ATM card (active). Once finished with the process, you can check your Post Office account online with your Post Office savings account login details.

Q3. Can I avail of any tax benefits with Post Office Savings Scheme?

Ans. Yes, you can get tax exemptions and deductions on a lot of schemes offered by the Post Office. The tax exemption will be on either the maturity amount, interest earned, deposits made, or all of them. Some such schemes are TD, PPF, NSC, SSA, etc.

Q4. Can students get any Post Office Savings Scheme?

Ans. Other than the Senior Citizen Savings Scheme (SCSS), the rest of the Post Office schemes can be availed by students aged 18 years or above.

Q5. Is it safe to invest in Post Office Saving Schemes?

Ans. Yes. Post Office Saving Schemes are backed by the government and so these are pretty safe and reliable.