Post Office Saving Schemes: Interest Rates On Nine Accounts Compared

Diwali, the festival of lights, is considered an auspicious occasion to invest. For people looking to invest, there are multiple investment avenues like Post office fixed deposit (FD), Post office Public Provident Fund (PPF), Post office recurring deposit (RD), among others, that can help them generate wealth. Interest rates on post office saving schemes move in line with the government's interest rates on small savings schemes. The government in September revised interest rates on small savings schemes for the quarter between October 1, 2018-December 31, 2018.

Post office savings account

Post office savings account interest rate is 4 per cent per annum, as mentioned on India Post's official website- indiapost.gov.in. The annual returns on post office savings account are the lowest of all the savings accounts offered by India Post. 

Post office recurring deposit (RD) account

Post office Recurring Deposit (RD) account offers an interest rate of 7.3 per cent per annum. The interest rate on post office RD account is compounded annually. On maturity, a recurring deposit of Rs. 10 per month fetches a return of Rs. 725.05 on maturity, as mentioned on India Post's official website- indiapost.gov.in. The post office RD account can be continued for another five years on a year-to-year basis. Post Office RD account can be opened by cash as well as cheque. Minimum amount for opening of post office recurring deposit account (RD) is Rs. 10 per month or any amount in multiples of Rs. 5, mentioned India Post.

Post Office Time Deposit (TD) or Fixed Deposit (FD) account

Post office time deposit (TD) or Fixed Deposit (FD) account offers interest rates across four maturities: one year, two years, three years, and five years. Post office fixed deposit for one year, two years, three years, and five years offer 6.9 per cent, 7 per cent, 7.2 per cent, and 7.8 per cent respectively. Interest is payable annually but is calculated quarterly. The minimum amount that one requires to open a fixed deposit with the post office is Rs 200 can be opened by cash or cheque. 

Post office monthly income scheme or MIS account

The post office MIS account offers an annual return of 7.3 per cent. The interest on post office MIS account is payable monthly.

Senior citizen savings scheme (SCSS)

The senior citizen savings scheme offers an interest rate of 8.7 per cent per annum, which is payable from the date of deposit on March 31/ September 30/December 31 in the first instance and thereafter, interest shall be payable on March 31, June 30, September 30 and December 31, noted India Post.

15-year public provident fund or PPF account

PPF accounts, which are also offered by banks, offer an interest rate of 8 per cent per annum. The interest on PPF accounts is compounded annually. A minimum of Rs 500 and a maximum of Rs 1,50,000 can be deposited in a financial year in a PPF account.

National savings certificates (NSCs)

National savings certificates (NSCs) offer an interest rate of 8 per cent per annum. This interest is payable annually but compounded quarterly. An NSC of Rs. 100 will offer Rs. 146.93 on maturity after five years, said India Post. NSCs have a lock-in period of five years.

Kisan Vikas Patra (KVP)

Kisan Vikas Patra certificates offer an interest rate of 7.7 per cent per annum. The interest is compounded annually. The amount invested in a KVP doubles in 112 months (9 years and 4 months).

Sukanya Samriddhi Account

The current interest rate on sukanya samriddhi accounts is fixed at 8.5 per cent per annum. It is calculated and compounded on a yearly basis. A legal guardian/natural Guardian can open this account in the name of girl child. A guardian can open only one account in the name of one girl child and maximum two accounts in the name of two different girl children, noted India Post.