“Post Office Investment: Savings Plans & Interest Rates”(post office interest rate 2024)
To meet the distinct demands of different investors, Indian Post provides a variety of investment alternatives. Since the Indian government supports all post office savings plans, they are all guaranteed to yield returns. The majority of post office investment plans are also exempt from taxes under Section 80C, which permits an exemption from taxes of up to Rs. 1,50,000. Continue reading to learn more about the Post Office’s numerous small savings programmes, such as the Kisan Vikas Patra, Post Office Monthly Income Scheme, Sukanya Samriddhi Yojana (SSY), Public Provident Fund (PPF), National Savings Certificate (NSC), and Senior Citizen Savings Scheme (SCSS) and more.
| Small Savings Scheme | Tenure | Tax Deduction on Investment? | Interest Taxable | Interest Rate |
| Senior Citizens Savings Scheme | 5 year | Yes | Yes | 8.2% |
| National Savings Certificate | 5 year | Yes | NO | 7.7% |
| Post Office Savings Account | NA | NO | YES | 4.0% |
| Post Office Recurring Deposit | 5 year | NO | YES | 6.7% |
| Post Office Monthly Income Scheme | 5 year | NO | YES | 7.4% |
| Post Office Time Deposit (1 year) | 1 Year | NO | YES | 6.9% |
| Post Office Time Deposit (2 year) | 2 year | NO | YES | 7% |
| Post Office Time Deposit (3 year) | 3 Year | NO | YES | 7.1% |
| Post Office Time Deposit (5 year) | 5 Year | Yes | Yes | 7.5% |
| Kisan Vikas Patra (KVP) | 30 Months Lock-in period | NO | Yes | 7.5% |
| Public Provident Fund (PPF) | 15 year | Yes | No | 7.1% |
| Sukanya Samriddhi Yojana | 21 year | Yes | NO | 8.2% |
Post Office Savings Account
1-Post Office savings account is like a savings account with a bank, except that it is held with a post office. 2-Only one account can be opened with one post office and can be transferred from one post office to another. 3-You can also open an account in the name of a minor. The Post Office savings account interest rate is 4% and is fully taxable. However, no TDS is deducted on the same. 4-Under the non-cheque facility, the minimum balance which is required to be maintained is Rs. 50/- 5-However a deduction of Rs. 10,000 per annum is available on your total savings account interest including post office savings interest under Section 80TTA of the Income Tax Act, 1961.
Monthly Income Scheme for Post Offices (POMIS)
1. A special programme that provides a set monthly income guarantee on the investor’s lump sum payment 2. The MIS account may be opened by any resident, either alone or jointly. This system allows minors to invest as well. The minor may even manage the account if he is older than ten years old. 3. Under the Post Office Monthly Income Scheme, the minimum investment amount is Rs. 1000, the maximum investment amount is Rs. 9 lakh for a single holding account, and Rs. 15 lakh for joint accounts. 4-At the moment, the post office’s MIS interest rate is 7.4% annually, payable on a monthly basis with a five-year maturity date. As an illustration, Mr. Suresh invests Rs. 2,00,000 in the Monthly Income Scheme of the Post Office. For five years, he will receive interest payments of Rs. 12,33 each month. After the tenure is over, he will get his deposit back. The money that is so received on a monthly basis may likewise be used to fund post office recurrent deposits. 5. By adding the balances of all the accounts, investors can have numerous accounts with a maximum investment of Rs. 9 lakh. Each holder will have an equal share in a joint account. Using the previous example as a guide, Mr. Suresh and his wife could open a joint account for up to Rs. 7 lakh. 6-The Post Office monthly income plan permits investors to withdraw their deposits following a year, providing additional liquidity. Nevertheless, there will be a 1% penalty for withdrawals made after three years and a 2% penalty for deposits made between one year and three years. 7-Accounts can be moved across the nation between post offices. This plan offers no significant tax benefits. Monthly interest is included in the amount of taxable income. The interest payout is subject to no TDS, and deposits are free from wealth tax. For investors who want a steady monthly income but are risk averse, the Post Office Monthly Income Scheme is a better option.
Post Office Recurring Deposit
* Post office RD is essentially a monthly investment with a 6.7% annual interest rate (compounded quarterly) for a set period of five years.
When the five-year fixed period is up, an RD account with 10,000 invested monthly will yield Rs. 1,13,659 for you.
* The Post Office Account RD programme benefits small investors by enabling them to make minimum monthly investments of Rs. 100 and beyond minimum investments of any amount in multiples of Rs. 10. The investment has no maximum amount.
* Two adult adults can also open joint accounts. A minor may also open the account in their name. You can open many accounts as well.
* It is possible to move RD between post offices.
* In the event that you fail to make any monthly investments, there is a default fee of one rupee for every 100.
* After a year, the account allows for a partial withdrawal of up to 50% of the balance, providing flexibility.
The post office RD has no TDS on interest. Investors’ income is subject to taxation based on their specific tax slab. It’s among the greatest investing options available to anyone searching for a low-risk way to consistently save money each month.
Time Deposit at the Post Office
* There are various investing tenure options available for post office time deposits. The appropriate current rate of interest is as follows:
| Rate (w.e.f. 01.04.Tenure | Tenure |
| 6.9% | 1 year Time Deposit |
| 7% | 2 year Time Deposit |
| 7.1% | 3 year Time Deposit |
| 7.5% | 5 year Time Deposit |
* A minimum investment of Rs. 1000 can be made. There’s no upper bound to it. The maximum number of accounts that a person may have is unlimited.
* Accounts may be formed in a shared holding arrangement or as a single holding. It is also permitted to invest in a minor’s name.
* Account transfers are possible between Indian post office branches.
* The time deposit will automatically renew for the same duration at the current interest rate on the day of maturity if it has already matured.
* The investment made in the five-year post office time deposit has a tax benefit. The Income Tax Act of 1961’s Section 80C allows for the deduction of the investment.
KVP, or Kisan Vikas Patra
* Kisan Vikas Patra provides an annual compound interest rate of 7.5%. You can buy it at any post office.
* Every 115 months, the invested amount doubles.
* The investment can be made in multiples of 100 and has a minimum limit of Rs. 1,000. There is no maximum restriction.
* Certificates can be approved to a third party and are readily transferable.
* Because it provides an encashment facility after 2.5 years of investment, the certificate is relatively liquid.
The principle amount invested is not deductible from taxes, and interest earned on the KVP is subject to taxation. Therefore, the Kisan Vikas Patra scheme is not tax-efficient. It is effective for novice and small investors who live in isolated places and don’t have access to other financial services.
Senior Savings Plan for Citizens
* For retired defence employees, the Senior Citizen Savings Scheme (SCSS) minimum entry age is beyond 50. Within one month of starting to receive retirement benefits, an individual who has elected to retire after the age of 55 may also open this account. In these situations, the amount invested shouldn’t be more than the corpus that is received upon retirement.
* The maximum amount that can be invested by a single person (total balance across all accounts) is Rs. 30 lakh. Multiples of Rs. 1000 can be used as the investment amount.
* A person may have several accounts in his name or jointly with his spouse.
* The current interest rate available is 8.2% annually, which is due on the first working day of each quarter. The deposit has a five-year maturity period. For example, you will receive Rs. 30,750 in interest per quarter if you deposit Rs. 15 lakh in this scheme now.
* The Senior Citizen Savings Plan permits early withdrawals of deposits at any time following the account’s opening date, though there are penalties in these situations. As per the most recent regulations from the government, if the SCSS account is closed before the full year of investing has elapsed, 1% of the deposit amount will be withheld.
* After the initial five-year maturity period, the account may be extended several times in increments of three years.
* Under Section 80C of the Income Tax Act, investments are deductible from taxes. However, if interest accrues more than Rs. 10,000 in a year, tax would be withheld at source.
PPF, or the Public Provident Fund
PPF is a long-term investment available at an interest rate of 7.1% annually (compounded annually) for a 15-year period. In a financial year, the maximum compensation under this scheme is Rs. 1,50,000. In addition, the deposit is eligible for an income tax deduction under Income Tax Act Section 80C.
* There is no upper or lower age limit to open a PPF account.
* In a fiscal year, investments with a minimum of Rs. 500 and a maximum of Rs. 1.5 lakh are permitted. Investments may be made in installments or as a lump payment.
* Only one holding form may be opened for a PPF account.
* By combining the balances of all your accounts, you can invest in the name of a minor without going over your investment cap.
* After the 15-year period is up, the maturity period may also be extended for an additional 5 years. Mature can be extended indefinitely in increments of five years.
* PPF is a pure long-term investment plan; early account closure is permitted only in the event of a major illness or the pursuit of higher education, and only after five years from the date of account opening. After five years have passed since the end of the year the account was opened, partial PPF withdrawals are also allowed.
* From the second financial year after account opening to the fifth year, investors are eligible to use the loan facility.
* Under Section 80C of the Income Tax Act, investments made into PPF accounts are eligible for tax deductions. Due to its interest’s complete tax exemption, it also provides a tax-efficient return. PPF interest, however, must be shown on your income tax return.
For investors who want tax exemptions, principle protection, and tax-free returns, this is a good scheme.
Certificate of National Savings (NSC)
* The NSC has a five-year maturity term. The 7.7% annual compound interest rate on non-recourse notes is due at maturity. In other words, after five years, your investment of Rs. 100,000 will yield you Rs. 1,44,903.
* With a minimum investment of Rs. 1000, there is no upper limit on investments. There are several denominations available for investment: Rs. 100, Rs. 500, Rs. 1,000, Rs. 5,000, and Rs. 10,000.
* The NSC Certificate may be obtained in the names of a single holding, a joint holding (up to three adults), a guardian acting on behalf of a juvenile or mentally incompetent person, or by a minor over ten years old.
* Under Section 80C of the Income Tax Act, an investment in NSC is tax deductible. Except for interest in the NSC’s final year, interest on NSC is considered to be reinvested under Section 80 C and is therefore tax deductible.
* NSC certificates may be given as collateral to obtain bank loans.
* It is possible to transfer certificates. During the investment period, transfers from one individual to another are permitted just once.
NSC is a tax-efficient and risk-free savings plan designed for conventional, long-term investors who do not have a high tolerance for risk.
Scheme Sukanya Samriddhi
* The Sukanya Samriddhi Yojana (SSY) is a programme designed with the welfare of girls in mind. At the moment, it provides an alluring 8.2% yearly compound interest rate.
* In a financial year, the minimum and maximum investment amounts are Rs. 1000 and Rs. 1,50,000, respectively. For fifteen years after the account starting date, you must invest at least the minimum amount annually. The account will then keep earning interest until it matures.
* Up to Rs. 1.5 lakh annually, investments made into the Sukanya Samridhhi Account are tax deductible under Section 80 C. Both the maturity money and the interest on the Sukanya Samriddhi Account are tax-free.
* The investment will mature twenty-one years from the account opening date, or when the girl child marries after turning eighteen. If the girl kid loses her Indian citizenship or becomes an NRI, the account will also need to be closed.
* Only a girl child’s parents or legal guardians may open a Sukanya Samriddhi account in her name. The girl must be 10 years old or younger when the account is opened.
* A girl child cannot open more than one account in her name. A maximum of two accounts may be opened in the names of two separate girl children by a parent or guardian.
* Failure to deposit the required minimum amount during a financial year may result in a penalty of Rs. 50.
* A girl child may only have premature closure after she reaches the age of majority, which is 18 years old, in order to get married or pursue further education.
* After turning 18, girls are also eligible for a partial withdrawal option (no more than 50% of the remaining amount).
* Under Section 80C of the Income Tax Act, parents and guardians are eligible for a tax credit on the invested amount. The girl kid receives the maturity revenues, which are entirely tax-free in her possession.
The SSY programme has become quite well-liked, particularly in rural India. It’s a terrific way to give the nation’s next generation of women financial security.
Interest Rates and Taxes for Various Savings Plans
The following are the various Post Office savings plans’ interest rates and taxation:
| Taxability | Interest Rate and Return | List of Schemes |
| Maximum deposit of Rs. 1,50,000 in a financial year is exempted under section 80C | 7.1% p.a. compounded annually | Public Provident Fund |
| Interest earned is Tax Free up to Rs. 10,000 p.a. from financial year 2012-13 | 4.00% p.a. on individual/joint accounts | Post Office Savings Account |
| 6.7% p.a. on individual/joint accounts | Post Office Recurring Deposit Account | |
| The investment under 5 Years TD is qualified for the benefit of Section 80C of the Income Tax Act, 1961 from 1st April 2007 | 6.9% (1 year), 7% (2 year), 7.1% (3 year) and 7.5% ( 5 year) | Post Office Time Deposit Account |
| The maximum investment limit is Rs. 9 lakh in single account and Rs. 15 lakh in joint account | 7.4% per annum payable monthly | Post Office Monthly Income Savings Account (MIS) |
| The maximum limit not exceeding Rs. 30 lakh and the investment under this scheme is qualified for the benefit of Section 80C of the Income Tax Act, 1961 from 1st April 2007 | 8.2 % per annum* | Senior Citizen Savings Scheme |
| 7.5% compounded annually | Kisan Vikas Patra | |
| The deposits are qualified for for tax rebate under section 80C of Income Tax Act and the interest accruing annually but deemed to be reinvested under Section 80C of IT Act | 7.7 % compounded annually but payable at maturity | National Savings Certificate |
| Maximum deposit of Rs. 1,50,000 in a financial year | 8.2% p.a. calculated on the annual basis | Sukanya Samriddhi Accounts |
Note: *For further information about the Senior Citizen Savings Scheme, please visit Indian Post’s official website.
The interest rates listed above are current as of April 1, 2024, and they go into effect on that date.
Timetable for Charges
The following are the Post Office Investment Scheme schedule fees:
| Rs. 50 | Duplicate Passbook Issue |
| Rs. 20/case | Deposit Receipt or Issue of Statement of Account |
| Rs. 100 | Cheque Dishonour Charges |
| Nil: Up to 10 leafs in a calendar year Rs. 2 per cheque leaf thereafter | Issue of Cheque Book (for Savings Bank a/c) |
| Rs. 100 | Pledging of Account |
| Rs. 100 | Account Transfer Fee |
| Rs. 50 | Cancellation or Change of Nomination Charges |
| Rs. 10 per registration | Issue of Passbook in Lieu of Lost or Mutilated Certificate |
Note: T/T will also be due on the service charges listed above, if applicable.
Benefits of Putting Money Into Post Office Savings Plans
A few main advantages of participating in Post Office Savings Schemes are as follows:
* Easy Documentation & Procedure: Post Office investment schemes are simple to invest in and enrol in thanks to little paperwork and hassle-free processes. These savings plans are available at post offices all throughout the nation and are appropriate for investors in both urban and rural areas.
* Competitive Interest Rates and Risk-Free: The interest rates offered by the Post Office Savings Scheme, which presently range from 4% to 8.2%, are quite competitive when compared to bank interest rates. Additionally, because these investments are supported by the government, there is very little risk associated with them.
* Tax Exemption: Section 80C allows for tax rebates on the deposit amount for the majority of these Post Office Savings Plans. Known as tax saving plans or income tax saving schemes, some programmes, such as the SSS (Sukanya Samriddhi Yojana), PPF, etc., also have tax exemption on the interest earned amount.
* A Variety of Products to Meet Different Investment Needs: These various Post Office Savings Plans are designed to meet the various needs of various investors. Investors can select investment schemes based on their own needs, as they differ in terms of deposit limitations, tax implications, and return on investment.
Now Required for All Post Office Schemes: Aadhaar and PAN
* As per the most recent announcement from the Ministry of Finance, in order to open a new Post Office scheme or account, you must enter your PAN and Aadhaar number. If you haven’t yet received an Aadhar card, you must present documentation of your enrollment application or enrollment ID when opening an account. You also need to give the Accounts Office your Aadhaar number within six months of opening a post office account.
* As of April 1, 2023, if you already have a post office account and have not yet entered your Aadhaar number, you will need to do so within the next six months. If, at the time of opening your post office account, you did not submit your PAN, you must do so within two months of the earliest of the following events occurring:
– The post office account balance at any one time is more than Rs. 50,000.
– The total amount of all credits in the account during any given fiscal year is greater than Rs. 1 lakh.
– The total amount of withdrawals and transfers made from the account in a given month exceeds Rs. 10,000.
* Please take note that your post office account will become inactive until your Aadhaar number and/or PAN are submitted to the accounts office if you fail to submit Aadhaar within the allotted period of 6 months and PAN within the prescribed term of 2 months.
Note: The Gazette of India is where we obtained this information. Go to https://egazette.nic.in/WriteReadData/2023/244822.pdf to learn more.
Frequently Asked Questions on Post Office Investment
Q1. In the Post Office Monthly Income Scheme, how do I invest?
Ans-A low-risk, reliable income option is the Post Office Monthly Income Scheme. 7.4% interest is paid annually on investments up to Rs. 9 lakh made individually and Rs. 15 lakh made in a combined account. Each person must have a MIS account in order to invest in a post office plan.
Q2. Can I take out cash at any post office?
Ans-Yes, in any post office, funds can be taken out of the Post Office account. The account holder is also free to take money out at any moment. However, in the case of a general account, a minimum balance of Rs. 500 must be kept.
Q3. How much money can I take out of my post office account?
Indeed.The post office account can be used to withdraw up to Rs. 10,000 in cash each day. But you can withdraw up to Rs. 25,000 every day using an ATM card from the post office.
Q4. How can I access my online Post Office account?
Ans-Yes, Indian Post Office offers its customers the ability to use internet banking to access their individual account details, among other things. The consumer needs to have an active DOP ATM card, valid individual or joint account, and KYC documentation in order to register for net banking.
Q5. Are Post Office investments free from taxes and safe?
Ans-It is safe since investments made through the Post Office are backed by the Indian government’s sovereign guarantee. Up to a certain amount, all of these programmes are tax-exempt, and some, like PPF and Sukanya Samridhi Yojna, also offer tax advantages on returns.
Q5. Exists a Post Office Programme specifically for students?
Ans-Students who are older than eighteen may apply for all programmes with the exception of the Senior Citizen Savings Plan. Sukanya Samriddhi Yojna (SSY) is a programme for female students in which parents are required to deposit a minimum amount or more, which is then given to the girl child when she becomes 21 when she reaches maturity.
Q7.What is the account minimum balance required?
Ans-The minimum amount needed for a post office account is different from the requirements for other account kinds, as follows:
Q8. How do I have my account or certificates encashed before they mature?
Ans-The following applies to certificates and accounts that are cashed before they mature:
