Post Office Schemes have become increasingly popular among investors nowadays because they are government-backed and promise risk-free returns simultaneously.
But when it comes to investing in these schemes, it becomes extremely important to consider all the available options. If you’re someone who is planning to invest in these schemes, you’ve come to the right place.
This article covers the various options available under post office schemes along with their interest rates table, calculators related to FD, RD, and monthly income schemes.
Post Office Schemes 2019
The Post Office offers a number of different savings schemes to investors.
Let’s take a look at the various schemes available under the post office in 2019
- Post Office Savings Account
- National Savings Recurring Deposit Account (5 Years RD)
- Post Office Monthly Income Scheme (POMIS)
- National Savings Time Deposit Account (TD)
- Senior Citizens Savings Scheme Account (SCSS)
- Public Provident Fund Account (PPF)
- National Savings Certificates (VIII Issue) Account (NSCs)
- Kisan Vikas Patra Account (KVP)
- Sukanya Samriddhi Account (SSA)
It must be noted that NRIs are not allowed to invest in these Schemes. It’s so because these Schemes are only available for individuals residing in India, e.g. resident Indians.
However, the only apparent exception is the Sukanya Samriddhi Scheme (SSA). In this post office scheme, the individual applicant should be a girl child aged between 1-10 years.
Which Is The Best Post Office Scheme?
When it comes to selecting the best post office scheme, it all depends on your requirements and ultimate goal.
Post Office Savings Account
If you want to go for a normal savings account, then the post office savings account is the best option for you.
National Savings Recurring Deposit Account (5 Years RD)
If you are willing to make regular investments for a higher interest rate, you can invest in 5 years RD for generating the desired returns.
Time Deposit Account (TD)
If you have a lump-sum amount for investment, you can invest in the time deposit scheme of the post office.
Investment is eligible for tax benefits under Section 80C for 5 years.
Post Office Monthly Income Scheme (POMIS)
You can invest in the post office monthly income scheme for an assured regular income.
There are no tax benefits under this scheme. Interest earned is taxable too.
Senior Citizens Savings Scheme Account (SCSS)
Again, you can invest in the senior citizen savings scheme for an assured regular income to fulfill your retirement needs. Additionally, the interest rates offered are much better.
Investment is eligible for tax benefit under Section 80C. TDS is applicable for interest more that 50,000.
Also Read : Senior Citizen Savings Scheme 2019
Public Provident Fund Account (PPF)
If you’re planning to go for long term debt investment, PPF is undoubtedly the best option.
Investment is eligible for tax rebate under Section 80C. Also, Interest and maturity is tax free.
Also Read : PPF withdrawal Rules
National Savings Certificates (VIII Issue) Account (NSCs)
If you want to go for long term investments, NSC is a relatively better option.
Investments upto 1.5 Lakhs are eligible for tax rebate under Section 80C.
Kisan Vikas Patra Account (KVP)
If you are investing for fulfilling your long term financial plan, KVP is the best low-risk savings option. Besides, KVPs can be encashed only after a period 2 and ½ years from the date of issue.
There is no tax on maturity but the interest earned is taxable.
Sukanya Samriddhi Account (SSA)
If you want to make an investment for your daughter’s education and marriage, Sukanya Samriddhi Account (SSA) is the best option.
Sukanya Samriddhi comes under EEE. Investment, interest and maturity is tax free.
Post Office Interest Rates Table
Here is the post office interest rates table for the year 2019.
Are Post Office Deposits Safe?
Since all post office deposits are government-backed, they’re completely safe and come with security assurance.
What Is The Rate Of Interest Of FD In Post Office?
First of all, it must be noted that there’s no fixed rate of interest of FD in the post office. Moreover, the rate of interest of FD in Post Office differs with each tenure.
- 1 Year Deposit account will fetch you returns up to 7%.
- 2 Years and 3 Years deposit account will also fetch you up to 7% returns.
- 5 Year account will fetch you up to 7.8% returns.
After How Many Years, FD Will Get Doubled In the Post Office?
For KVPs, the money will double in 9 years and 4 months, i.e. 112 months. The interest rate for FD is 7.7% and it’s compounded annually.
There’s a very simple method for calculating the total amount of time after which your money will double.
Divide 72 by the prevailing interest rates.
For example, if the prevailing interest rate is 8%. Your money will double in 9 years.
On the other hand, if the prevailing rate of interest is 7.7%, as in Kisan Vikas Patra, your money will double in 9 years and 4 months.
Let’s take a look at the advantages of these Schemes
Th schemes are risk-free as they’re backed by the Government of India. Furthermore, these schemes offer good returns along with the highest level of safety and assurance for financial security in the future.
It’s very simple to opt for these schemes. One can easily enroll in a scheme at authorised post office branches and banks situated across India. Owing to the widespread availability of these schemes, they’re suitable for people living in both rural and urban areas.
The best thing about the post office schemes is that it has different schemes with different tenures. Besides, the tenure for term deposits ranges from 1 to 5 years. At the same time, you can purchase Kisan Vikas Patra for a time period of 9 years and 4 months.
Wide Range of Interest Rates
There is a wide range of interest rates available varying from 4% in post office savings account to 8.7% in the Senior Citizens Savings Scheme.
Most of the post office schemes offer tax benefits under Section 80C. Some schemes offer tax benefits at the time of investment whereas some on interest rates. Additionally, there’re a couple of schemes like the PPF, and Sukanya Samriddhi that are free from tax even at the time of maturity.
Post Office FD & RD Calculator – Fixed Deposit and Recurring Deposit Calculator
You can download the Post Office FD & RD Calculator for calculating the total returns. Also, you can calculate the amount at maturity.