The Department of Posts or India Post offers a variety of services besides delivering mails. It offers nine saving schemes, provides life insurance covers and retail services like bill connection and sale of forms. The nine saving scheme accounts of India Post can be opened across its network of over 1.55 lakh post offices. Interest rates on post office saving schemes move in line with the government's interest rates on small savings schemes, which are revised on a quarterly basis. The government last month revised interest rates on small saving schemes for the quarter between October 1, 2018-December 31, 2018.
Post office saving schemes
India Post's nine saving schemes are as follows: post office savings account, post office recurring deposit or RD account, post office time deposit or TD account, post office monthly income scheme or MIS account, senior citizen savings scheme (SCSS), 15-year public provident fund or PPF account, national savings certificates (NSCs), kisan vikas patra or KVP, and sukanya samriddhi accounts.
The annual returns on the nine post office savings schemes mentioned above vary between 4 per cent and 8.7 per cent with effect from October 1, according to indiapost.gov.in, the website of India Post.
Given below are the details of interest rates offered by post office saving schemes:
Post office savings account
Post office savings account interest rate is 4 per cent per annum. The annual returns on post office savings account are the lowest of all the savings accounts offered by India Post. The interest rate on post office savings account has not been changed as the government did not change interest rates on savings accounts for December quarter.
Post office recurring deposit or RD account
Post office recurring deposit offers an interest rate of 7.3 per cent per annum. The interest rate on post office RD account is compounded annually. If you deposit Rs 10 per month in post office RD account, it fetches Rs 725.05 on maturity, said India Post. The post office RD account can be continued for another five years on a year-to-year basis.
Post office time deposit or TD account
Post office time deposit, also known as post office fixed deposit account, offers interest rates across four maturities: one year, two years, three years, and five years. Interest on post office fixed deposits is payable annually but compounded quarterly. 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.
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, India Post said. This saving scheme is also offered by banks.
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.
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 government also recently reduced the maturity period of KVPs to 112 months from the earlier 118 months. The amount invested in a KVP doubles in 112 months (9 years and 4 months), according to indiapost.gov.in.
Sukanya Samriddhi Account
The sukanya samriddhi account, which is opened under the government-backed Sukanya Samriddhi Yojana, is for girl children only. 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. Sukanya samriddhi accounts are offered by banks as well. The government had recently reduced the minimum deposit in these accounts to Rs 250 from the earlier Rs 1,000.