Types of Post Office Saving Schemes in India

1. Post Office Savings Account

Post office savings account lets you deposit, withdraw and save your amount as you prefer. It is similar to the savings account of banks. Following are some of its features:

• You can create a single or joint savings account as per your preference.
• It is not possible to have more than one savings account under your name.
• The minimum amount you will have to deposit is ₹500. All subsequent deposit amounts will have to be a multiple of 10.
• There is no upper threshold for total deposits.
• The minimum amount that you can withdraw is ₹50.
• You cannot withdraw an amount that will bring your total savings amount lower than ₹500.

2. National Savings Recurring Deposit Account (RD)

It is a savings scheme in which you need to deposit a fixed amount every month to build a corpus for the future. The tenure for this post office RD is 5 years. You can choose to invest as little as ₹100 per month on your RD account, thereby opting in for the scheme without much financial difficulty. Here are some of the unique features of this post office scheme:

• The interest on your deposits is calculated quarterly.
• There is no bar to the number of national savings RD accounts that you can open under your name.
• You can create a single or joint account.
• Deposit amounts need to be multiples of 10.
• Your subsequent deposits can either be on any day between the 1st to the 15th of a month or between the 16th to the last day in a month. In case you fail to make the deposit, you will have to pay the penalty, depending on your monthly deposit amount.
• After continuing your deposits for up to 1 year, you can opt for a loan against your aggregated fund amount. You will be able to borrow up to 50% of your total credit in your account.

3. National Savings Time Deposit Account (TD)

The post office time deposit lets you grow your money at an attractive annual interest rate which is revised from time to time by the Finance Ministry. The rate depends on the performance of government securities. You can open your time deposits in the post office branch for the tenure of 1 year, 2 years, 3 years, or 5 years, at your convenience. Following are some other features that you need to know about these time deposits:

• There is no upper threshold for your deposit. Whatsoever, the minimum amount of your deposit will have to be ₹1,000 and the amount must be in multiples of 100.
• You can enjoy the benefit of tax deduction under Section 80C of the Income Tax Act of India.
• You receive the earned interest on your savings account annually.
• You cannot withdraw your deposited amount before 6 months of your investment. In case of premature withdrawal, the applicable interest rate will decrease.

4. National Savings Monthly Income Account (MIS)

MIS is a savings scheme that lets you enjoy a monthly earnings on your deposit till the maturity period. For this, you will have to create an account and deposit an amount between ₹1,000 and ₹4.5 Lakhs. You will get the interest earned on your fund right from the completion of the first month to the end of the tenure. Following are other important features of the National Savings MIS:

• It comes with a lock-in period of 5 years. For withdrawal before time, you will have to encounter a certain percentage of reduction in your deposits.
• You can opt for getting the interest amount directly in your post office savings account.
• The interest earned through this scheme is taxable.
• The applicable interest rate is revised quarterly.

5. Senior Citizens Savings Scheme Account (SCSS)

This government-backed SCSS is tailored for senior citizens aged over 60 years. Nevertheless, you can invest in this scheme if you are between 55 and 60 years of age and if you have opted for your superannuation under the voluntary retirement scheme (VRS).

You can earn a fixed interest on your deposit on a quarterly basis. Another major benefit of this type of post office scheme is that you can reduce your tax obligation on your investment under Section 80C of the Income Tax Act of India. Here are some other important features of SCSS:

• Your investable amount on this savings scheme account should ideally range between ₹1,000 and ₹15 Lakhs.
• You can close your account only after 5 years of opening it. There will be a certain percentage of deduction on your principal amount if you choose to close your SCSS account prematurely.
• You can extend the maturity period of your account for more than 3 years.
• You will have to pay tax if your total earned interest is higher than ₹50,000.

6. Public Provident Fund (PPF ) Account

PPF is a type of post office savings scheme that lets you stay invested for the long term. It comes with a maturity period of 15 years. You can, however, partially withdraw the deposited amount after 5 years. Like SCSS, you can also reduce your taxable income in a financial year under Section 80C of the Income Tax Act of India. It lets you earn an interest higher than bank deposits. The Finance Ministry of India is responsible for revising the interest rate on a quarterly basis.

Here are some other notable features that you need to know about PPF:

• PPF has a minimum tenure of 15 years. You can increase the duration in a 5-year block.
• You will have to deposit a minimum amount of ₹500 in your PPF account. Further, the total deposited amount must not exceed an upper cap of ₹1.5 Lakhs in a financial year.
• You are entitled to withdraw your amount partially only once in a financial year. The maximum amount of partial withdrawal can be 50% of your aggregated balance of the previous year.
• You can apply for a loan up to a certain percentage of the aggregated balance in your account.

7. Sukanya Samriddhi Account (SSA)​

Sukanya Samriddhi Yojana (SSY) is an initiative taken by the Indian Government under the campaign named ‘Beti Bachao, Beti Padhao’. Its aim is to assist parents to grow a fund for their girl child’s education and marriage. Parents can start investing in this scheme if the age of their girl child is lower than 10 years. The investment under this scheme also comes with the additional benefits of tax deduction under Section 80C of the Income Tax of India.

Here are some other features that you should know about this type of post office scheme:

• The minimum and maximum threshold of deposits in an SSY account are ₹250 and ₹1.5 Lakhs, respectively.
• There can be only one account in the name of a girl. Parents can cover a maximum of two girls. However, they can create more than two accounts if they have twin girl children.
• The maturity period of an SSY account is 21 years. However, you are allowed to close your account and withdraw your money before that period in case of your daughter’s marriage after she becomes 18 years old.
• You can also withdraw up to 50% of the previous year’s aggregated sum in your account if your daughter becomes 18 years old or she passes the 10th class.

8. National Savings Certificates (NSC)

National Savings Certificate (NSC) acts as an investment instrument from which you can get guaranteed earnings after maturity. It comes with a lock-in period of 5 years. The NSC deposit is transferable in the name of another person under certain circumstances, like the death of the investor. Here are some major features of this savings scheme:

• The minimum amount of your investment will have to be ₹1,000. There is no upper limit on your deposit.
• Under Section 80C of the Income Tax Act of India, you can leverage the benefit of a tax deduction on the total deposited amount in a financial year.

9. Kisan Vikas Patra (KVP)

This is a savings scheme tailored for farmers of India. You can earn a fixed interest on your savings deposited in this account. It gives an annual compound interest rate of 7.0%. The scheme boasts of doubling the deposited amount in 120 months/10 years. Following are some more details that you need to know about KVP:

• You will have to deposit at least ₹1,000 in your KVP account. However, there is no maximum limit.
• You can open as many accounts as you prefer.
• The maturity period is determined by the Finance Ministry of India and it can vary from time to time.
• The KVP certificate is transferable to another person under certain circumstances, including the death of the account holder or by court order.