India Post, which provides postal services across the country, also offers investment avenues by offering government's small savings scheme through its vast network of post offices spread across the length and breadth of the country. India Post offers government's small savings schemes such as Senior Citizen Savings Scheme, Monthly Income Account, Public Provident Fund (PPF) Scheme, Kisan Vikas Patra and Sukanya Samriddhi Yojana (SSY) Account Scheme among other saving schemes. Interest rate on small savings schemes is changed from time to time and the same rates are implemented by India Post and other designated financial institutions for the government-run small savings schemes. (Also read: All You Need To Know About Sukanya Samriddhi Yojana)
Below are the interest rates being offered by India Post on various small savings schemes:
| Instruments | Rate of interest | Compounding Frequency |
|---|---|---|
| Post Office Savings Account | 4% | Annually |
| 1 Year Time Deposit | 5.5% (Annual Interest R. 561 on Rs. 10000 deposit) | Quarterly |
| 2 Year Time Deposit | 5.5% (Annual Interest R. 561 on Rs. 10000 deposit) | Quarterly |
| 3 Year Time Deposit | 5.5% (Annual Interest Rs. 561 on Rs. 10000 deposit) | Quarterly |
| 5 Year Time Deposit | 6.7% (Annual Interest R. 687 on Rs. 10000 deposit) | Quarterly |
| Senior Citizen Savings Scheme | 7.4% (Quarterly interest Rs. 185 on Rs. 10000 deposit) | Quarterly and Paid |
| Monthly Income Account | 6.6% (Monthly int. Rs. 55 on Rs. 10000 deposit) | Monthly and paid |
| Public Provident Fund Scheme | 7.10% | Annually |
| Kisan Vikas Patra | 7.60% | Annually |
| Sukanya Samriddhi Account Scheme | 7.60% | Annually |
Source: India Post
Some of the post office saving schemes also qualifies for income tax benefits. Using these products, an investor can claim a deduction up to Rs 1.5 lakh in a financial year from taxable income under Section 80C of the Income Tax Act. Income tax benefits are available on Time Deposit (TD), Senior Citizen Savings Scheme (SCSS), Public Provident Fund (PPF) and National Savings Certificates (NSCs).
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