Post Office Savings Scheme

Comparison of All Post Office Schemes 2021 – NSC, PPF, KVP, SSY, RD, TD, SCSS, MIS

In the post-pandemic world, people have realized the importance of investments and savings. And while investing in private corporations might scare the average person, the post office enters the situation like a knight in shining armour.

The post office, over the years, has maintained its position and reputation as a safe and long-term investment option for people who are from rural areas and wish to make maximum returns through minimal risks.

For such people, the post office offers 9 schemes to choose from, which fall into different categories – Recurring account (RD), Time Deposit (TD), National Savings Certificate (NSC), Public Provident Fund (PPF), Kisan Vikas Patra (KVP), Senior Citizens Saving Scheme (SCSS), Sukanya Samriddhi Yojana (SSY), Post Office Savings (PO-SB), and Monthly Income Scheme (MIS).

Comparison of the schemes

Name of the schemeInterest Rate 2021Minimum /Maximum depositInvestment periodLiquidityTax benefits
Post Office Savings Account4% per annum which would be compounded annuallyMinimum ₹500 for account opening and minimum deposit ₹500. Minimum withdrawal is ₹50.No lock-in periodOffers anytime withdrawalNil
Recurring Deposit (Post Office RD)5.8% per annum compounded quarterlyMinimum ₹100 per month or any multiples of ₹10. No maximum deposit limit5 yearsRD can be closed prematurely after 3 years from the date of account opening by submitting the prescribed application form.Interest < 10,000 per annum – TDS not applicable. Interest > ₹10,000 then TDS offered would be at 10% is applicable. Tax rate on interest as per IT slab rates.
National Savings Certificate (NSC)6.8% compounded annually but payable only at maturityMinimum ₹1000 and then in multiples of ₹100. No maximum limit5 yearsPremature withdrawal is not allowedTax rebate under section 80C of the IT act
Monthly Income Scheme (MIS)6.6% per annum payable monthlyMinimum deposit in multiples of ₹1000 and maximum limit is of ₹4.5 lakh for individuals and ₹9 lakh for joint accounts.5 yearsPremature closure between 1 to 3 years with a 2% deduction and after 3 years with 1% deduction.No TDS and no Tax rebate under section 80C of the IT act.
Senior Citizens Savings Scheme (SCSS)7.4% per annum from 31 March to 30 September or 31 DecemberOnly 1 deposit with a minimum of ₹1000 or in its multiples. Maximum limit is ₹15 lakhs5 yearsPremature closure allowed only after 1 year with 1.5% deduction and after 2 years with 1% deduction.If earned interest more than ₹1000 then TDS deducted is at the source of interest and benefits under section 80C of the IT act.
Kisan Vikas Patra (KVP)6.9% per annum compounded annuallyMinimum ₹1000 and then in multiples of ₹100, No maximum limit.Amount invested gets doubled in 9 years and 10 months (118 months)Premature encashment is allowed after 2 years 6 months.KVP investment does not qualify for rebate under section 80C of the IT act. TDS at the rate of 10% deduction is applicable on interest earned. 
Sukanya Samriddhi Yojana7.6% per annum compounded yearlyMinimum ₹250 and then in multiples of ₹50. Maximum limit is ₹1.5 lakh per annum.Till the completion of 21 years of age of the girl childPartial withdrawal of 50% balance amount allowed after attaining 18 years of age.EEE tax exemption and deposits are free from taxes and maturity amount is also exempted from taxes under section 80C of the IT act.
Public Provident Fund (PPF)7.1% per annum compounded yearlyMinimum ₹500 and maximum ₹1,50,000. Deposits can be made lump-sum or even in installments.15 yearsPremature closure is not allowed before 15 yearsThe interest earned is completely tax-free but the deposits qualify for deduction from income under section 80C of the IT act.

In Conclusion

The government has made these small savings schemes accessible through post offices to provide a stable investment opportunity for the public. These schemes are easy to manage by ensuring people with decent returns and keeping their investments secure.

Therefore, if the above-mentioned features and advantages match your financial expectations, then invest in a post office savings scheme to ensure that your financial future at minimum risk.

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