Post Office Investment Schemes in India: 6 Popular Options

Post Office Investment Schemes in India: 6 Popular Options

FPJ Web DeskUpdated: Wednesday, February 21, 2024, 02:14 PM IST
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Post Office Investment Schemes in India: 6 Popular Options |

Post Office Saving Schemes are one of the safest investment options available in India. These schemes have been in existence for a long time, and have continued to be popular among investors due to their high returns, stability, and convenience. The Indian Government has launched various Post Office Saving Schemes to encourage people to save and invest for their future.

In this article, we discuss 6 Popular Post Office Investment Schemes in India, their features, and benefits.

1. Post Office Savings Account:

Post Office Savings Account is the most basic saving scheme offered by the Indian Postal Service. It is a deposit account that can be opened with just Rs.20. The account holder can also avail of the ATM facility, standing instructions for recurring deposits, and internet banking.

The interest rate for Post Office Savings Account is 4% per annum payable quarterly. The interest earned is tax-free up to Rs.10,000 per year. The minimum balance requirement for the account is Rs.500.

2. National Savings Certificates (NSC):

National Savings Certificates are issued by the Indian Government and offer a fixed interest rate for a fixed period. An investor can purchase an NSC for a minimum of Rs.100 and in multiples thereof. The maturity period of NSC is five years, and the interest rate is 6.8% per annum, which is compounded annually.

The interest earned on NSC is eligible for tax exemption under Section 80C of the Income Tax Act, 1961. However, the interest earned on NSC is taxable on maturity.

3. Public Provident Fund (PPF):

Public Provident Fund is a long-term investment scheme that offers guaranteed returns. It has a maturity period of 15 years, which can be extended for another five years. An investor can open a PPF account with a minimum deposit of Rs.500, and the maximum deposit limit is Rs.1.5 lakhs per year.

The current interest rate on PPF is 7.1% per annum, which is compounded annually. The interest earned and maturity amount are tax-free.

4. Post Office Monthly Income Scheme (POMIS):

Post Office Monthly Income Scheme is a fixed income investment scheme that provides a steady monthly income. One can invest a minimum of Rs.1,500 and in multiples of Rs.100. The maturity period for POMIS is five years, and the interest rate is 6.6% per annum.

The interest earned on POMIS is taxable. However, one can claim a tax deduction under Section 80C for the investment made in POMIS.

5. Kisan Vikas Patra (KVP):

Kisan Vikas Patra is a certificate scheme launched by the Indian Government to provide financial security to farmers and other rural people. An investor can purchase a Kisan Vikas Patra for a minimum of Rs.1,000 and in multiples of Rs.1,000 thereafter. The maturity period of KVP is 124 months, and the interest rate is 6.9% per annum.

The interest earned on KVP is taxable. However, one can claim a tax deduction under Section 80C for the investment made in KVP.

6. Sukanya Samriddhi Yojana (SSY):

Sukanya Samriddhi Yojana is a saving scheme launched by the Indian Government to encourage parents to save for their girl child's future. An investor can invest in SSY with a minimum of Rs.250 and a maximum of Rs.1.5 lakhs per year. It has a maturity period of 21 years from the date of opening the account.

The current interest rate on SSY is 7.6% per annum, which is compounded annually. The interest earned on SSY is tax-free, and the investment made is eligible for tax exemption under Section 80C.

It is essential to note that the interest rates on these Post Office Saving Schemes are reviewed and revised from time to time by the Indian Government. Therefore, it is essential to check the current interest rates before investing.

Summary:

Post Office Saving Schemes in India are a reliable investment option for investors looking for steady returns and guaranteed stability. These schemes have a variety of options catering to specific requirements of different customers, such as the National Savings Certificate, Sukanya Samriddhi Yojana, and the Post Office Savings Account. Summing up, these investment schemes have a long-term investment horizon, making them highly popular among conservative investors. Considering the ever-changing market conditions, investors are advisable to exercise complete discretion and perform thorough research before investing.

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