Different Investment option with Post Office for Small Savings & Tax Benefit Like NSC, PPF, RD, Time Deposit

Indian Post is under the control of central government and comes under the Ministry of Communications and Information Technology. The Postal Service Board, the apex management body of the Department, comprises the Chairman and six Members. India has the largest Postal Network in the world with over 1, 55,015 Post Offices (as on 31.03.2009) of which 1, 39,144 (89.76%) are in the rural areas.  There are different investment products through which Indian Post raises the money for Indian Government and rate of interest are decided by Ministry of Finance, Department of Economic Affairs. Post Office Savings Account, 5-Year Post Office Recurring Deposit Account, Post Office Time Deposit Account, Post Office Monthly Income Account Scheme, Senior Citizen Savings Scheme, 15 year Public Provident Fund Account, Kisan Vikas Patra (Discontinued from 01.12.2011) , National Savings Certificates (NSC), 5 Years National Savings Certificate (VIII Issue), 10 Years National Savings Certificate (IX Issue).

Interest rate Comparison Chart for Different Investment Options by Post Office for Last 3 Years

SchemeRate of interest
w.e.f.01.04.2012
Rate of interest
w.e.f.01.04.2013
Rate of Interest
w.e.f. 01.04.2014
 Savings Deposit4%4%4%
1 Year Time Deposit8.20%8.20%8.40%
2 Year Time Deposit8.30%8.20%8.40%
3 Year Time Deposit8.40%8.30%8.40%
5 Year Time Deposit8.50%8.40%8.50%
5 Year Recurring Deposit8.40%8.30%8.70%
5 Year SCSS9.30%9.20%9.20%
5 Year MIS8.50%8.40%8.40%
5 Year NSC8.60%8.50%8.50%
10 Year NSC8.90%8.80%8.80%
PPF8.80%8.70%8.70%

 Post Office Savings Account

  • Interest rate:  4.0% per annum on individual/ joint accounts.
  • Account Opening: Minimum Rs.20/- for opening.
  • Other Features: Minimum balance Rs 50/-, Interest earned is Tax Free up to Rs.10,000/- per year,  Account can be opened in the name of minor and a minor of 10 years and above age can open and operate the account.

 5-Year Post Office Recurring Deposit Account

  • Interest rate:  8.4% per annum (quarterly compounded) with effect from 01.04.2014
  • Account Opening: Minimum INR 10/- for opening or any amount in multiples of Rs.5/-. No maximum limit
  • Other Features: Account can be transferred from one post office to another, Single account can be converted into Joint and Vice Versa.

Post Office Time Deposit Account 

  • Interest rate:  1yr.A/c – 8.40%, 2yr.A/c-8.40%, 3yr.A/c-8.40%, 5yr.A/c-8.50% with effect from 01.04.2014
  • Account Opening: Minimum INR 200/- for opening or any amount in multiples of Rs.5/-. No maximum limit
  • Income Tax Deduction 80C: The investment under 5 Years TD qualifies for the benefit of Section 80C of the Income Tax Act, 1961 from 1.4.2007.
  • Other Features: Account can be opened in the name of minor and a minor of 10 years and above age can open and operate the account, Single account can be converted into Joint and Vice Versa

Post Office Monthly Income Account Scheme 

  • Interest rate:  8.4% per annum (quarterly compounded) with effect from 01.04.2014
  • Account Opening: In multiples of INR 1500/-. Maximum investment limit is Rs. 4.5 lakhs in single account and INR 9 lakhs in joint account.
  • Other Features: Account can be transferred from one post office to another, Single account can be converted into Joint and Vice Versa. Can be prematurely encashed after one year but before 3 years at the discount of 2% of the deposit and after 3 years at the discount of 1% of the deposit. (Discount means deduction from the deposit.)

Senior Citizen Savings Scheme

  • Interest rate: 9.20% per annum, payable from the date of deposit of 31st March/30th Sept/31st December in the first instance & thereafter, interest shall be payable on 31st March, 30th June, 30th Sept and 31st Decembe with effect from 01.04.2014
  • Account Opening: There shall be only one deposit in the account in multiple of INR.1000/- maximum not exceeding INR 15 lakh.
  • Income Tax Deduction 80C: The investment qualifies for the benefit of Section 80C of the Income Tax Act, 1961 from 1.4.2007.
  • Other Features: An individual of the Age of 60 years or more may open the account. Maturity period is 5 years. Account can be opened by cash for the amount below INR 1 lakh and for INR 1 Lakh and above by cheque only.

15 year Public Provident Fund Account

  • Interest rate:  8.70% per annum (quarterly compounded) with effect from 01.04.2014
  • Account Opening: open account with INR 5/- but has to deposit minimum of INR 500/- in a financial yearMinimum INR. 500/- Maximum INR. 1,00,000/- in a financial year. Deposits can be made in lump-sum or in 12 installments.
  • Income Tax Deduction 80C: The investment qualifies for the benefit of Section 80C of the Income Tax Act, 1961 from 1.4.2007. Also Interest is completely tax-free.
  • Other Features: Maturity value can be retained without extension and without further deposits also.Premature closure is not allowed before 15 years. Loan facility available from 3rd financial year  and no attachment under court decree order

Kisan Vikas Patra (Discontinued from 01.12.2011)

National Savings Certificates (NSC)

5 Years National Savings Certificate (VIII Issue)

  • Interest rate:  8.5% compounded six monthly but payable at maturity. INR. 100/- grows to INR 151.62 after 5 years with effect from 01.04.2014
  • Account Opening: Minimum INR. 100/- No maximum limit available in denominations of INR. 100/-, 500/-, 1000/-, 5000/- & INR. 10,000/-
  • Income Tax Deduction 80C: The investment qualifies for the benefit of Section 80C of the Income Tax Act, 1961 from 1.4.2007. Also Interest is completely tax-free.
  • Other Features: The interest accruing annually but deemed to be reinvested under Section 80C of IT Act.

10 Years National Savings Certificate (IX Issue)

  • Interest rate:  8.80% compounded six monthly but payable at maturity. INR 100/- grows to INR 236.60 after 10 years with effect from 01.04.2014
  • Account Opening: Minimum INR. 100/- No maximum limit available in denominations of INR. 100/-, 500/-, 1000/-, 5000/- & INR. 10,000/-
  • Income Tax Deduction 80C: The investment qualifies for the benefit of Section 80C of the Income Tax Act, 1961 from 1.4.2007. Also Interest is completely tax-free.
  • Other Features: The interest accruing annually but deemed to be reinvested under Section 80C of IT Act.

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