Accounting · April 23, 2019

Get up to 8% p.a. interest rate by investing in post office saving schemes

Are you looking for a safe and tax-free saving scheme that will give you higher returns at a minimal investment? If yes, then you should consider investing in the saving schemes offered by India Post. The speciality of these post office schemes is that while these ask for a low investment amount, in return they offer a high interest rate. Out of the 9 different schemes offered by the Post Office, National Savings Certificate, Sukanya Samriddhi Yojana (SSY), 15-Year Public Provident Fund (PPF), and Senior Citizen Savings Scheme (SCSS) offer the best interest rate. By investing in these schemes, you can get a minimum of 8% p.a. interest rate or even more. Here go the scheme details:


The National Savings Certificates, abbreviated as NSC, is a profitable option for individuals who want to make a safe investment with guaranteed returns. It can be subscribed to for a tenure of 5 years. While earlier the scheme was available for a maturity period of 10 years as well, it is not available anymore. It comes with an interest rate of 8% p.a. which is compounded on a yearly basis. However, you will get the entire maturity value (investment amount and interest income) only at the time of maturity. The minimum amount that you can invest in this scheme is Rs.100. However, you will have the flexibility of increasing the deposit amount whenever you want to. There is no maximum limit of contribution. As an extra benefit, being an NSC account holder you will be eligible to get tax rebate under Section 80C of the Income Tax Act, 1961 for investments of up to Rs.1.5 lakh. You can transfer your NSC account from one post office to another anywhere in India. The scheme doesn’t allow premature withdrawals unless there are exceptional circumstances like the sudden demise of the account holder or special orders from the court. You can nominate any of your family members, even if he/she is a minor, as a nominee under this scheme.


The Sukanya Samriddhi Account is a special scheme offered by the government of India which aims to safeguard the future of the girl children in India. Under this scheme, individuals who have a girl child below 10 years of age can open a savings account in any of the banks affiliated to this scheme. The account can also be opened by a legal guardian of the girl child. However, this scheme permits to open only 1 account for each girl child. In a family, maximum 2 SSA accounts can be opened in the name of two girl children. This means if you have more than two daughters you can open an SSA only for two of them. To run the account, you need to deposit a minimum of Rs.1,000 and a maximum of Rs.1.5 lakh every financial year. The interest rate that is offered on this account is 8.5% p.a. and the amount is compounded annually. You can’t withdraw any amount from the account before your daughter in whose name the account has been opened attains 21 years of age. When she turns 21, she can withdraw the entire maturity amount and close the account as per her wish. In between for the purpose of meeting her educational expenses, 50% of the amount can be withdrawn by her once she attains 18 years of age.


A 15-year Public Provident Fund Account or PPF account can be opened by making an initial deposit of just Rs.100. However, in order to keep the account in an operational state, the account holder must deposit a minimum amount of Rs.500 and a maximum amount of Rs.1.5 lakh in a financial year. You can either make the payments in instalments (12) or can pay a lump sum based on your convenience. The interest rate offered by this account is 8% p.a. which is compounded per year. Hence, by contributing to this post office scheme sponsored by the government of India you can build a huge corpus over a period. However, before opening a PPF account, you must know that this scheme has a fixed maturity period of 15 years and you will not be able to make a premature closure of the account any time before that. The additional advantage of contributing to this scheme is that you will not be charged with any tax on the interest income from this account. You will also have the liberty to make a withdrawal from your PPF account once in a year in the event of an emergency after the completion of 6 financial years from the date of account opening. Bankbazaar provides detailed information about interest rate offered by PPF account is 8% p.a.


The Senior Citizen Savings Scheme, also known as SCSS, enables the senior citizens to get a high amount as interest income on their savings. Hence, it is ideal for those who want to secure their post-retirement life. Individuals who are 60 years of age or more can open an SCSS account for a maturity period of 5 years. An individual of 55 years of age or more but below 60 years can also open an SCSS account upon retiring on superannuation or under VRS. However, he/she must open the account within a month of receiving the retirement benefits. In such cases, the investment amount should not be more than the retirement benefit amount. The scheme permits you to deposit a maximum amount of Rs.15 lakh in the account. Remember, the amount that you deposit should always be in multiples of Rs.1,000. The best thing is, you will get an interest rate of 8.7% p.a., which is the highest among all other post office schemes. After 1 year of making a deposit, at any point if you want to pre close the account, you can do that against a deduction amount equivalent to 1.5% of the deposit made earlier. However, if such premature closure is done after 2 years of opening the account 1% of the deposit will be deducted.

Investing your hard-earned money in these post office schemes is not only profitable but also safe. These are sponsored by the government of India so you can be assured that you will get the entire promised value at maturity. Since these schemes offer a high interest rate of 8% p.a. or more which is compounded and reinvested regularly you can accumulate a huge corpus over the investment period. Hence, it will be wise to assess the most ideal scheme for you and start investing from now to build a financially secured future.