Post office schemes – FD, Interest rates, Benefits, returns calculator in 2021

post office scheme

Last Updated on 9 months ago by Raj Kumar

Post office scheme

Post office schemes are extremely popular amongst the retail investors in India because it gives slightly higher interest rates compared to other banks and offers a wide range of investment options. The investment in the Post office scheme is seen as an investment which is extremely secure since its backed by the Govt of India.

There are many types of Post office schemes. In this article we will go through in details of what are the Post office scheme, interest rates, eligibility criteria and try to compare them with other investment choice available in the market.

post office scheme
Post office scheme in 2021

Page Contents

What are the different types of Post office scheme available?

There are mainly 9 types of Post office scheme available to invest , they are –

  1. Post Office Savings Account(SB)  
  2. Post Office National Savings Recurring Deposit Account(RD) 
  3. Post Office National Savings Time Deposit Account(TD) / Post Office fixed deposits
  4. Post Office National Savings Monthly Income Account(MIS)
  5. Post Office Senior Citizens Savings Scheme Account(SCSS) 
  6. Post Office Public Provident Fund Account(PPF) 
  7. Post Office Sukanya Samriddhi Account(SSA)
  8. Post Office National Savings Certificates(NSC)
  9. Post Office Kisan Vikas Patra(KVP)

Post Office Savings Account(SB)  

Post office savings account is like any ordinary bank savings account. You can deposit, withdraw or make any transactions like you can do with any of your bank account.

Post Office Savings Account(SB) eligibility criteria

  • a single adult 
  • two adults only (Joint A or Joint B) 
  • a guardian on behalf of minor 
  • a guardian on behalf of person of unsound mind 
  • a minor above 10 years in his own name

Post Office Savings Account(SB)  features

  • Interest rate – 4% per annum
  • Minimum amount for account opening – Rs 500
  • If no deposit/withdrawal takes place in an account during continuous three financial years, the account shall be treated as silent/dormant 

Post Office National Savings Recurring Deposit Account(RD) 

The National Savings Recurring Deposit Account(RD) is a preferred choice by many investors to park their surplus money to earn regular income. This is one of the most popular Post office scheme.

Post Office National Savings Recurring Deposit Account(RD) eligibility criteria

  • a single adult 
  • Joint Account (up to 3 adults) (Joint A or Joint B) 
  • a guardian on behalf of minor 
  • a guardian on behalf of person of unsound mind 
  • a minor above 10 years in his own name.

Post Office National Savings Recurring Deposit Account(RD) features

Interest rate – 5.8​ % per annum (quarterly compounded)

Minimum INR 100/- per month or any amount in multiples of INR 10/-. No maximum limit.

Subsequent deposit shall be made up to 15th day of month, if account is opened up to 15th of a calendar month. 

Subsequent deposit shall be made up to last working day of month, if account is opened between 16th day and last working day of a calendar month.

Post Office National Savings Recurring Deposit Account(RD) Loan

  • After 12 instalments deposited and account is continued for 1 year not discontinued depositor may avail loan facility up to 50% of the balance credit in the account. 
  • Loan can be repaid in one lump-sum or in equal monthly instalments. 
  • Interest on loan will be applicable as 2% + RD interest rate applicable to the RD account. 
  • Interest will be calculated from date of withdrawal to date of repayment. 
  • In case loan is not repaid till the maturity, loan plus interest will be deducted from the maturity value of the RD account.

Post Office National Savings Recurring Deposit Account(RD) Premature closure

  • RD Account can be closed prematurely after 3 years from the date of account opening by submitting prescribed application form at concerned Post Office. 
  • PO Savings Account interest rate will be applicable if the account is closed prematurely even one day before maturity. 
  • No premature closure of account shall be permissible until the period for which the advance deposits have been made.

Post Office National Savings Recurring Deposit Account(RD) maturity

  • 5 years (60 monthly deposits) from the date of opening. 
  • Account can be extended for further 5 years by giving application at concerned Post Office. Interest rate applicable during extension will be the interest rate at which account was originally opened. 
  • Extended account can be closed any time during the period of extension. For completed years, RD interest rate will be applicable and for period less than a year, PO Savings Account interest rate will be applicable. 
  • RD account can be retained up to 5 years from the date of maturity without deposit also.

Post Office National Savings Time Deposit Account(TD) / Post Office fixed deposits

Post Office National Savings Time Deposit Account(TD) is like a fixed deposit; it has different maturity options and the interest depends on the maturity timeline. This is one of the most popular Post office scheme.

Post Office fixed deposits eligibility criteria

  • a single adult 
  • Joint Account (up to 3 adults) (Joint A or Joint B) 
  • a guardian on behalf of minor 
  • a guardian on behalf of person of unsound mind 
  • a minor above 10 years in his own name.

Post Office fixed deposits features

Interest rates as of November 2020 . Interest payable annually but calculated quarterly.

PeriodRate
1yr.A/c5.5%
2yr.A/c5.5%
3yr.A/c5.5​%
5yr.A/c6.7​ %
Post Office fixed deposits interest rates

Post Office fixed deposits premature closure rules

  • No deposit shall be withdrawn before the expiry of six months from the date of deposit. 
  • If TD account closed after 6 month but before 1 year, PO Savings Account Interest rate will be applicable. 
  • If 2/3/5 year TD account prematurely closed after 1 year, interest shall be calculated 2 % less than of TD interest rate (i.e. 1/2/3 years) for completed years, and for part period less than a year, PO Savings Interest rates will be applicable. 
  • TD account can be closed prematurely by submitting prescribed application form with pass book at concerned Post Office. 

Post Office National Savings Monthly Income Account(MIS)

Post Office National Savings Monthly Income Account(MIS) is great choice for retired persons or someone who wants regular income from a fixed investment. This post office scheme is preferred by retired personals to earn regular income.

Post Office National Savings Monthly Income Account(MIS) eligibility criteria

  • a single adult 
  • joint Account (up to 3 adults) (Joint A or Joint B)) 
  • a guardian on behalf of minor/ person of unsound mind 
  • a minor above 10 years in his own name.

Post Office National Savings Monthly Income Account(MIS) features

As of November 2020

Interest rate – 6​.6​ % per annum payable monthly.

Minimum and Maximum investment amount

  • In multiples of INR 1000/-
  • Maximum investment limit is INR 4.5 lakh in single account and INR 9 lakh in joint account
  • An individual can invest maximum INR 4.5 lakh in MIS (including his share in joint accounts)
  • For calculation of share of an individual in joint account, each joint holder have equal share in each joint account.

Post Office National Savings Monthly Income Account(MIS) premature closure rules

  • No deposit shall be withdrawn before the expiry of 1 year from the date of deposit. 
  • If account is closed after 1 year and before 3 year from the date of account opening, a deduction equal to 2% from the principal will be deducted and remaining amount will be paid. 
  • If account closed after 3 year and before 5 year from the date of account opening, a deduction equal to 1% from the principal will be deducted and remaining amount will be paid. 
  • Account can be prematurely closed by submitting prescribed application form with pass book at concerned Post Office.

Post Office Senior Citizens Savings Scheme Account(SCSS) 

Post Office Senior Citizens Savings Scheme Account(SCSS) is a popular This is one of the most popular Post office scheme choice amongst retired persons. It gives higher interest rates than conventional investment choices.

Post Office Senior Citizens Savings Scheme Account(SCSS) eligibility criteria

  • An individual above 60 years of age. 
  • Retired Civilian Employees above 55 years of age and below 60 years of age, subject to condition that investment to be made within 1 month of receipt of retirement benefits. 
  • Retired Defense Employees above 50 years of age and below 60 years of age, subject to condition that investment to be made within 1 month of receipt of retirement benefits. 
  • Account can be opened as individual capacity or jointly with spouse only. 
  • The whole amount of deposit in a joint account shall be attributable to the first account holder only.

Post Office Senior Citizens Savings Scheme Account(SCSS) features

As of November 2020

Interest rate – 7.4 ​% per annum, payable from the date of deposit of 31st March/30th Sept/31st December in the first instance & thereafter, interest shall be payable on 31st March, 30th June, 30th Sept and 31st December.

Minimum and Maximum investment amount – There shall be only one deposit in the account in multiple of INR.1000/- maximum not exceeding INR 15 lakh.

Post Office Senior Citizens Savings Scheme Account(SCSS) premature closure rules

  • Account can be prematurely closed any time after date of opening. 
  • If account closed before 1 year, no interest will be payable and if any interest paid in account shall be recovered from principle. 
  • If account closed after 1 year but before 2 year from the date of opening, an amount equal to 1.5 % will be deducted from principal amount. 
  • If account closed after 2 year but before 5 year from the date of opening, an amount equal to 1 % will be deducted from principal amount. 
  • Extended account can be closed after the expiry of one year from the date of extension of the account without any deduction.

Post Office Public Provident Fund Account(PPF) 

Post Office Public Provident Fund Account(PPF) is one of the most popular investment option. PPF is seen as wealth creator by many Indians as it provides higher interest rates, qualifies for tax exemption and is also tax free on the gains when it matures.

Post Office Public Provident Fund Account(PPF) eligibility criteria

Below are the eligibility criteria for PPF account in Post office –

  • a single adult by a resident Indian. 
  • a guardian on behalf of minor/ person of unsound mind . 
  • Retired Defense Employees above 50 years of age and below 60 years of age, subject to condition that investment to be made within 1 month of receipt of retirement benefits. 

Post Office Public Provident Fund Account(PPF) features

As of November 2020 –

Interest rate – 7.1 % per annum (compounded yearly).

Minimum and Maximum investment amount – Minimum INR. 500/- Maximum INR. 1,50,000/- in a financial year.Deposits can be made in lump-sum or in ​instalments.

Maturity

  • Account will mature after 15 F.Y. years excluding FY of account opening. 
    On maturity depositor has the following options:-
  • Can take maturity payment by submitting account closure form along with passbook at concerned Post Office 
  • Can retain maturity value in his/her account further without deposit, the PPF interest rate will be applicable and payment can be taken any time or can take 1 withdrawal in each FY.
  • Can extend his/her account for further block of 5 years and so on (within one years of maturity) by submitting prescribed extension form at concerned Post Office.

Post Office Public Provident Fund Account(PPF) premature closure rules

Premature closure shall be allowed after 5 years from the end of the year in which the account was opened subject to following conditions. 

-> In case of life threatening disease of account holder, spouse or dependent children.

-> In case of higher education of account holder or dependent children.

-> In case of change of resident status of account holder ( i.e. became NRI).

At the time of premature closure 1% interest shall be deducted from the date of account opening/date of extension as the case may be. 

Account can be closed on above conditions by submitting prescribed form along with pass book at concerned Post Office. 

Post Office Public Provident Fund Account(PPF) rules in case of death

  • In case of death of account holder, the account shall be closed and nominee or legal heir(s) shall not be allowed to continue deposits in the account. 
  • At the time of closure due to death PPF rate of interest shall be paid till the end of the preceding month in which account is closed.

Post Office Sukanya Samriddhi Account(SSA)

Post Office Sukanya Samriddhi Account(SSA) is a good choice for a girl child. Post Office Sukanya Samriddhi Account(SSA) is an initiative by Govt of India to encourage parents to save for Girl child’s education and marriage. It offers higher interest rates as compared to other investment options.

Post Office Sukanya Samriddhi Account(SSA) eligibility criteria

  • By the guardian in the name of girl child below the age of 10 years.
  • Only one account can be opened in India either in Post Office or in any bank in the name of a girl child.
  • This account can be opened for maximum of two girls in a family. Provided in case of twins/triplets girls birth more than two accounts can be opened.

Post Office Sukanya Samriddhi Account(SSA) features

As of November 2020 –

Interest rate – Rate of interest 7.6​​% Per Annum(with effect from 01-04-2020 ),calculated on yearly basis ,Yearly compounded.

Minimum and Maximum investment amount – Minimum INR. 25​0/-and Maximum INR. 1,50,000/- in a financial year. Subsequent deposit in multiple of INR 50/- Deposits can be made in lump-sum No limit on number of deposits either in a month or in a Financial year

Post Office Sukanya Samriddhi Account(SSA) withdrawal rules

  • Withdrawal may be taken from account after girl child attains age of 18 or passed 10th standard. 
  • withdrawal may be taken up to 50% of balance available at the end of preceding F.Y. 
  • withdrawal may be made in one lump sum or in instalments, not exceeding one per year, for a maximum of five years, subject to the ceiling specified and subject to actual requirement of fee/other charges.

Post Office Sukanya Samriddhi Account(SSA) premature closure rules

  • Account may be prematurely closed after 5 years of account opening on the following conditions
  • On the death of account holder. (from date of death to date of payment PO Savings Account interest rate will be applicable).
  • On extreme compassionate grounds
  • Life threatening disease of the account holder
  • death of the guardian by whom the account is created

Post Office National Savings Certificates(NSC)

Post Office National Savings Certificates(NSC) is a good choice for investors who are looking for a safe secure returns. This is one of the most popular post office schemes amongst the middle class investors.

Post Office National Savings Certificates(NSC) eligibility criteria

  • a single adult 
  • Joint Account (up to 3 adults) 
  • a guardian on behalf of minor or on behalf of person of unsound mind 
  • a minor above 10 years in his own name.

Post Office National Savings Certificates(NSC) features

As of November 2020-

Interest rate – 6.8 % compounded annually but payable at maturity.

Minimum and maximum investment amount – Minimum of Rs. 1000/- and in multiples of Rs. 100/- No Maximum Limit

Post Office National Savings Certificates(NSC) premature closure

-NSC may not be prematurely closed before 5 years except the following conditions : -​

(i) On the death of a single account, or any or all the account holders in a joint account 
(ii) On forfeiture by a pledgee being a Gazetted officer. 
(iii) On order by court.

Post Office Kisan Vikas Patra(KVP)

Post Office Kisan Vikas Patra(KVP) was originally created for Indian farmers but looking at its popularity the Govt of India has extended the scheme to all the Indian citizens who meet the eligibility criteria.

Post Office Kisan Vikas Patra(KVP) eligibility criteria

  • a single adult 
  • Joint Account (up to 3 adults) 
  • a guardian on behalf of minor or on behalf of person of unsound mind 
  • a minor above 10 years in his own name.

Post Office Kisan Vikas Patra(KVP) features

As of November 2020 –

Interest rate– 6.9 % compounded annually

Minimum and maximum investment amount – Minimum of Rs. 1000/- and in multiples of Rs. 100/- No Maximum Limit.

Post Office Kisan Vikas Patra(KVP) premature closure rules

KVP may be prematurely closed any time before maturity subject to the following conditions : –

(i) On the death of a single account, or any or all the account holders in a joint account 
(ii) On forfeiture by a pledgee being a Gazette officer. 
(iii) When order by court. 
(iv) After 2 years and 6 months from the date of deposit.

Post office scheme interest rates

Sl.No.InstrumentsRate of interest w.e.f 01.04.2020 to 31.12.2020Compounding Frequency
01.Post Office Savings Account​​4.0Annually
02.1 Year Time Deposit5.5(Annual Interest R. 561 on Rs. 10000 deposit)Quarterly
03.2 Year Time Deposit​​5.5(Annual Interest R. 561 on Rs. 10000 deposit)Quarterly
04.3 Year Time Deposit​​5.5(Annual Interest Rs. 561 on Rs. 10000 deposit)Quarterly
05.5 Year Time Deposit6.7(Annual Interest R. 687 on Rs. 10000 deposit)Quarterly
06.5 Year Recurring Deposit Scheme​​5.8 Maturity value for Rs. 100 Dn. 5 Year = 6969.67 After extension with deposit. 6 Year = 8620.98 7 Year= 10370.17 8 Year= 12223.03 9Year= 14185.73 10Year=16264.76 Quarterly
07.Senior Citizen Savings Scheme​​7.4(Quarterly interest Rs. 185 on Rs. 10000 deposit)Quarterly and Paid
08.Monthly Income Account​​6.6(Monthly int. Rs. 55 on Rs. 10000 deposit)Monthly and paid
09.National Savings Certificate (VIII Issue)6.8(Maturity Value Rs. 1389 for Rs.1000 deposit) Accrued Interest for IT purpose for Rs. 1000 Dn. 1stYear= Rs.68.00 2ndYear=Rs.72.62 3rd Year=Rs.77.56 4th Year=Rs.82.84 5th Year=Rs.88.47Annually
10.Public Provident Fund Scheme​​7.1Annually
11.Kisan Vikas Patra​​6.9 (will mature in 124 months)Annually
12.Sukanya Samriddhi Account Scheme​​7.6Annually
Post office scheme interest rates in 2021

Which scheme is best in post office?

PPF and Sukanya Samriddhi Account Scheme​​ are the best post office scheme considering they give the highest interest rates.

How many years FD will double in post office?

It will take more than 10 years to double your money in post office fixed deposits.

Which is better Bank FD or Post Office FD?

Although post office fixed deposits offer slightly better interest rate than normal banks but if you consider the ease of doing business and access to your money you will find bank FDs are better than post office FDs.

Is Post Office MIS good?

Yes post office MIS is good considering it offers good interest for your monthly income.

Is Monthly Income Scheme in Post Office taxable?

Yes Monthly Income Scheme in Post Office are taxable. The gains from the Monthly Income Scheme in Post Office will be added to your total income for tax calculation purposes.

What is the post office FD interest rate in 2021

The 5 year FD in post office has 6.7% interest rate.

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