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Post Office Saving Schemes: Interest Rates, Minimum Deposit, Premature Closure Rules

Interest rates on post office saving schemes move in line with government's interest rates on small savings schemes.

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Post Office Saving Schemes: Interest Rates, Minimum Deposit, Premature Closure Rules

Some of thepost office saving schemes qualify for income tax benefits.


India Post or Department of Posts, which runs postal services in the country, offers nine types of small saving schemes. These include regular savings account, 5-year recurring deposit, time deposit (TD) account, Monthly Income Scheme (MIS) account, Senior Citizen Savings Scheme (SCSS), 15-year Public Provident Fund Account (PPF), National Savings Certificates (NSC), Kisan Vikas Patra (KVP), and Sukanya Samriddhi accounts. Interest rates on these saving schemes move in line with government's interest rates on small savings schemes, which are reviewed on a quarterly basis

Given below are key things to know about the 9 post office saving schemes:

1. For the current quarter ending June 30, 2019, investment in post office small savings schemes fetches returns to the tune of 4-8.7 per cent, according to a Ministry of Finance statement dated March 29, 2019. Here are the interest rates and compounding frequency of all types of post office saving schemes:

Post office small saving schemeRate of interest for quarter ending March 31, 2019Compounding frequency
Savings Deposit4.00%Annually
1-Year Time Deposit7.00%Quarterly
2-Year Time Deposit7.00%Quarterly
3-Year Time Deposit7.00%Quarterly
5-Year Time Deposit7.80%Quarterly
5-Year Recurring Deposit7.30%Quarterly
5-Year Senior Citizen Savings Scheme8.70%Quarterly and paid
5-Year Monthly Income Scheme7.70%Monthly and paid
5-Year National Savings Certificate8.00%Annually
Public Provident Fund Scheme8.00%Annually
Kisan Vikas Patra7.7% (will mature in 112 months)Annually
Sukanya Samriddhi Account Scheme8.50%Annually

(As mentioned on India Post's official website)

2. India Post has set a certain sum of money as the minimum deposit in case of these small saving accounts. Here are the minimum investment required in different types of post office saving accounts:

Account nameMinimum amount required to open account
Savings account (Cheque account)Rs 20
Savings account (non Cheque account)Rs 20
Monthly Income Scheme (MIS)Rs 1,500
Fixed Deposit (FD) AccountRs 200
Public Provident Fund (PPF)Rs 500
Senior Citizen Savings Scheme (SCSS)Rs 1,000

(As mentioned on India Post's official website)

3. With some of its saving schemes, India Post offers the facility of premature closure or encashment. Here are the permissible limits set by post office for premature closure/encashment of accounts:

Different Savings Accounts
NSCs (VIII Issue)Maturity period 5 years (for certificates issued on or after .01.11.2011). No premature encasement possible.
SBCan be closed at any time
RDPremature closure permissible after 3 years - only SB rate is permissible
TDPremature closure permissible after 6 months
MISPremature closure permissible after 1 year
Senior CitizenPremature closure after 1 year

4. Post office offers an ATM-cum-debit card facility with its regular savings account. A certain number of transactions are offered free of cost at ATMs with a specific transaction limit. Customers are charged for transactions at ATMs over and above these permitted number of free transactions. Here are the transaction limits and related charges levied by post office on its ATM cards:

India Post (post office) ATM transaction limits/charges
Daily ATM cash withdrawal limitRs 25,000
Cash withdrawal limit per transactionRs 10,000
Charges for transactions done at DOP ATMsFree (Both Financial & Non Financial) with a limit of 5 Financial transactions per day
Permissible free transactions at other Bank ATMs (per month)

Metro Cities - 3 free transactions (Both Financial & Non Financial)

Non Metro Cities - 5 free transactions (Both Financial & Non Financial)

Charges after exceeding permissible free transaction limit at other Bank ATMsFinancial & Non Financial Transactions - Rs 20 + Applicable GST

(As mentioned on India Post's official website)

5. Some of the post office saving schemes qualify 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. 



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