scorecardresearch8 post office investment schemes with their latest interest rates

8 post office investment schemes with their latest interest rates

Updated: 05 Mar 2023, 11:01 AM IST
TL;DR.
The post office offers several investment schemes to the public. These investments have different features and benefits, and you can choose the one that suits your financial goals and needs. In this article, we are going to cover all the investment avenues offered by postal offices in India.
Post Office Monthly Scheme (POMIS) is a high return scheme offered by India Post.

Post Office Monthly Scheme (POMIS) is a high return scheme offered by India Post.

As an investor, we have multiple products to invest in. These products are offered by various financial institutions like banks, insurance companies, asset management companies & NBFCs. These products have their own features in terms of risk & returns. Banks offer fixed deposits where the returns are fixed and guaranteed. Asset management companies offer mutual funds where the returns are dependent upon the category of mutual fund scheme where the investor plans to invest.

In India, the post office also offers several investment schemes to the public. These investments have different features and benefits, and you can choose the one that suits your financial goals and needs.

In this article, we are going to cover all the investment avenues offered by postal offices in India.

Post Office Savings Account: This scheme is like a regular savings account in a bank. The minimum deposit amount is Rs. 500, and the account can be opened with an initial deposit of Rs. 20. The account earns an interest rate of 4% per annum. You also get an ATM to withdraw money for your day-to-day use.

Post Office Time Deposit Account: This is like a fixed deposit in a bank. The scheme allows you to deposit your money for a fixed period, ranging from 1 year to 5 years. The interest rate varies according to the duration of the deposit, with higher rates offered for longer-term deposits.

Post Office Recurring Deposit Account: This scheme allows you to save a fixed amount of money every month for a period of 5 years. The interest rate is 5.8% per annum, and the minimum deposit amount is Rs. 10 per month. This is like a recurring deposit offered by banks.

National Savings Certificate: The National Savings Certificate (NSC) is a popular investment scheme offered by the Indian Postal Service. It is a fixed-income investment scheme that allows individuals to invest their money for a period of 5 years. The investment in NSC qualifies for a tax deduction under Section 80C of the Income Tax Act.

The NSC offers a fixed rate of interest, which is compounded annually and paid out at maturity. The current interest rate for NSC is 7% per annum for the 5-year deposit. One can invest in NSC with a minimum of Rs. 1,000 in the multiples of Rs. 100 with no limit on the maximum investment amount. Interest earned on NSC is taxable.

Kisan Vikas Patra: The KVP is a government-backed investment scheme, which makes it safe and secure. The scheme offers a fixed rate of interest, which is compounded annually and paid out at maturity. The current interest rate for KVP is 7.2% per annum. This means your money doubles in 120 months (10 years).

The investment in KVP qualifies for a tax deduction under Section 80C of the Income Tax Act. The KVP offers a fixed rate of interest, which is compounded annually and paid out at maturity. One can invest in KVP with a minimum of Rs. 1,000 in the multiples of Rs. 100 with no limit on the maximum investment amount. Interest earned on KVP is taxable.

Public Provident Fund: PPF is a very well-known investment avenue as it is offered by banks too. There is no difference between the PPF offered by banks and the post office.

Post Office Monthly Income Scheme (POMIS): POMIS is a popular investment scheme offered by the Indian Postal Service. It is a fixed-income investment scheme that allows individuals to invest a lump sum amount and earn a fixed rate of interest monthly. One of the unique features of POMIS is that it is a government-backed investment scheme, which makes it safe and secure.

The investment amount in POMIS is also eligible for tax benefits under Section 80C of the Income Tax Act, up to a limit of Rs. 1.5 lakh per annum. The minimum investment amount for POMIS is Rs. 1,000, and the maximum investment amount for an individual is Rs. 4.5 lakh, while for a joint account, the maximum investment amount is Rs. 9 lakhs. The POMIS is an ideal investment option for retired individuals and those who want a regular source of income.

Senior Citizen Savings Scheme (SCSS): SCSS is a popular investment scheme offered by the Indian government for senior citizens aged 60 years and above. The scheme is also available to retired individuals aged 55 years or above, subject to certain conditions. The SCSS is a fixed-income investment scheme that offers a higher rate of interest than other fixed-income investment options.

The current interest rate for SCSS is 8% per annum, which is paid out on a quarterly basis. The investment period for SCSS is 5 years, which can be extended for an additional 3 years after maturity. The minimum investment amount for SCSS is Rs. 1,000, and the maximum investment amount is Rs. 15 lakhs.

TIP: Interest rates on above investment options keep on changing. An investor must check India postal service website to check the latest rates.

Rohit Gyanchandani is Managing Director at Nandi Nivesh Private Limited

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We explain post office monthly income scheme here.
First Published: 05 Mar 2023, 11:01 AM IST