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Are the Post Office Savings Schemes Helpful

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Post Office Savings Schemes

The post office offers a myriad of schemes that are beneficial for Indian middle-class families. Post office schemes are popular because they are virtually risk-free and are quite reliable. They also offer handsome returns when compared to some other products. 

There are about 1.54 lakh post offices across the country, thus, you are never too far away from one. Here are some of the post office savings schemes that you can utilise. 

  • Savings Account:

    To open a Post office savings account, you need a minimum of INR 500. The accounts are open to all residents of the country and they can open either a single account or a joint account. For all the deposits made to the savings account, you will earn a 4% annual return.

    The account gives you access to ATM card, e-banking, cheque book and mobile banking services, on request. Also, you can avail a deduction of up to INR 10,000 on the interest earned. 

  • Time Deposit Account:

    The post office time deposit account is available for four different tenures, i.e. 1 year, 2 years, 3 years and 5 years. You can open the account with a minimum deposit of INR 1,000. A 3-year term account will fetch you 5.5% interest per annum and a 5-year account will fetch 6.7% interest per annum. Though the interest is calculated on a quarterly basis, the payouts are annual.

    Should you opt for the 5-year maturity plan, you can avail of deductions under Section 80C. however, you cannot withdraw your deposits before the completion of 6 months from the date of deposit.

  • 5 Year Recurring Deposit Account:

    The name might give away a bit about the account. This is an account for recurring deposits with a term of 5 years. The minimum amount that you need to invest per month is INR 100 and you will earn 5.8% per annum as interest. The interest compounds every quarter, thereby giving you healthy returns. Once you complete 12 instalments without defaulting, you can avail a loan of up to 50% of the deposit amount.

  • Senior Citizen Savings Scheme:

    The senior citizen savings scheme is a retirement scheme where one can deposit a lumpsum amount. You can deposit anywhere between INR 1,000 to INR 15 lakhs. The scheme offers an attractive interest rate of 7.4% per annum and the interest is calculated and paid every quarter. 

    You should be more than 60 years old to open this account. Your investment towards this account is deductible under Section 80C. 

  • National Savings Certificates:

    The tenure of the National Savings Certificates is five years and you need to deposit a minimum of INR 1,000. You will receive 6.8% interest per annum but the interest is only paid on maturity. There aren’t any restrictions on opening accounts for an individual. And deposits qualify for deductions under Section 80C. 

Depending on what exactly you are looking for, there are quite a few schemes from the Post Office that can be helpful.