These post office schemes are giving better returns than bank FDs! Check details for up to 8.2% interest

Post Office Savings Schemes: The government changes the interest rates of small savings schemes every three months. This also includes post office schemes. There has been no change in the interest rates of these small savings schemes for the April-June quarter of the current financial year. Despite no increase in the rates of these investment options, these post office schemes are still giving better returns than most bank FDs, especially the FDs offered by government banks.

Post Office Small Savings Schemes offer investors several options with interest rates up to 8.2%. Most of these schemes also offer tax benefits under Section 80C of the Income Tax Act. In such a situation, investors are advised to carefully assess the tax benefits of these small savings schemes before taking an investment decision. For your convenience, details have been given here about the various features of the top 5 small savings schemes of the post office, maturity period and returns in the form of interest.

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Post Office Monthly Income Scheme Account (MIS)

Post Office Monthly Income Scheme is a better option for investment after retirement. Apart from a single account, there is also the facility of opening a joint account with the spouse.

Post Office Monthly Income Scheme gives investors an opportunity to earn regularly. In Post Office Monthly Income Scheme (POMIS), a maximum of Rs 9 lakh can be deposited through a single account and a maximum of Rs 15 lakh through a joint account. A minimum investment of Rs 1000 is required to open an account, after which deposits can be made in multiples of Rs 1000. Tax is applicable on the income earned in the form of interest and this scheme also does not get the benefit of tax exemption under Section 80C of Income Tax.

Interest Rate: This scheme (Small Savings Schemes) has an annual interest rate of 7.4 percent. The annual interest on the money deposited in it is divided into 12 parts, and it will come to your account every month. If you do not withdraw the money monthly, it will remain in your post office savings account and you will get interest further by adding this money along with the principal. The maturity of this scheme is 5 years, but after 5 years it can be extended according to the new interest rate.

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Other important things

No deposit amount can be withdrawn before the expiry of 1 year from the date of deposit.
If the scheme is closed after 1 year and before 3 years from the date of opening the account, an amount equal to 2 per cent of the principal will be deducted and the remaining amount will be paid.
If the scheme is closed after 3 years and before 5 years from the date of opening the account, then 1 percent of the principal amount will be deducted and the remaining amount will be paid.
The account can be closed prematurely by submitting the prescribed application form along with the passbook to the concerned post office.

Kisan Vikas Patra

Kisan Vikas Patra is a savings certificate issued by the Government of India. This scheme offers fixed interest rates and guaranteed returns. There is no tax deduction benefit available in this.

Interest rate: This scheme gives a return of 7.5 percent per annum. In this sense, your investment here will double in 9 years and 7 months i.e. 115 months. Last year in April 2023, its interest rates were increased from 7.2 percent to 7.5 percent.

The minimum investment in this scheme can be made from Rs 1000. KVP has certificates of Rs 1000, Rs 5000, Rs 10,000 and Rs 50,000, which can be purchased from the post office. At the same time, there is no limit on maximum investment. This scheme is especially for farmers, although anyone can invest in it. But there is no benefit of tax exemption on this scheme.

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Mahila Samman Savings Certificate

Mahila Samman Saving Certificate is an initiative started by the government to promote the habit of saving among Indian women. Any woman can invest in this scheme, that is, any woman can open an account under the Mahila Samman Saving Certificate Scheme. If the girl is below 18 years of age, then she can open an account under the supervision of her parents or guardian. This scheme does not provide any tax exemption benefits. Tax rules are applicable on the income earned in the form of interest, that is, tax will have to be paid for the interest received on this.

Interest Rate: The Mahila Samman Saving Certificate Scheme gives an interest rate of 7.50 percent on the amount deposited on the basis of quarterly compounding. MSSC will be deposited in the account and will be paid at the time of closing the account. The account opened or deposited amount in violation of the rules will be eligible to earn interest at the post office savings account interest rate. Women can invest up to Rs 2 lakh in this scheme.
The maturity period of the scheme is 2 years. Premature withdrawal facility is also provided in this scheme. After a period of one year, the account holder can withdraw 40 percent of the total deposit from his account. If the account holder dies, in such a case the nominee will have the right to withdraw the entire deposit amount.

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National Savings Certificate (NSC)

National Savings Certificate (NSC) is a government scheme with guaranteed returns. It is a fixed income investment option, which attracts investors who do not want to take any market risk.

Interest rate: According to the post office, 7.7 percent annual compounding interest is being given on the 5-year National Savings Certificate Scheme. In this scheme, interest is compounded annually and is payable on maturity. You cannot renew this scheme on maturity after 5 years.

Main characteristics

Any person can open a single account whereas in case of a joint account, this account can be opened by three people. A guardian on behalf of a minor or any person on behalf of an ill person can run an NSC account. This 5-year government scheme can be started in post offices across the country, in which an account can be opened with a minimum of Rs 1000. Certificates of 100, 500, 1000, 5000, 10,000 or more are available in NSC. There is no limit to invest in it. That means you can buy any number of certificates.

There is no limit on the purchase of NSC, a person can buy any number of NSC and investing in National Savings Certificate provides tax exemption under Section 80C of the Income Tax Act. However, this exemption is available only on investment up to Rs 1.50 lakh. The interest earned from NSC for the first 4 years is reinvested, hence tax exemption is given.

Senior Citizen Savings Scheme (SCSS)

Senior Citizen Savings Scheme is supported by the Central Government. Senior citizens living in India who have crossed the age of 60 years can open an account in this scheme and invest a lump sum amount. Retired employees in the age group of 55-60 years who have opted for Voluntary Retirement Scheme (VRS) can also invest in it. Senior citizens can open a single account or a joint account with their wife. You can open an account individually or jointly and get regular income with benefits like deduction claim in tax.

Interest rate: Currently, the investment amount in Senior Citizen Savings Scheme is getting interest at the rate of 8.2 percent on an annual basis. This rate is applicable from January 1, 2024. In this, the interest amount is paid on a quarterly basis.

According to the post office website, a minimum of Rs 1,000 and a maximum of Rs 30 lakh can be kept in an SCSS account. A maximum of Rs 30 lakh can be deposited in a single account or a joint account with wife and a maximum of Rs 60 lakh can be deposited in 2 separate accounts. You can extend this account for another 3 years after the maturity of 5 years.