Post Office Saving Scheme: Interest Rates, Minimum Investment, Premature Closure
India Post or Department of Post, which runs the postal network of the country, also offers nine types of government-sponsored savings schemes. These include savings account, five-year recurring deposit (RD), time deposit or fixed deposit (FD), monthly income scheme (MIS) account, senior Citizens Savings Scheme (SCSS), 15-year Public Provident Fund (PPF) and National Savings Certificates (NSC), according to India Post's official website - indiapost.gov.in. A post office account under any of the small savings schemes except recurring deposit can be opened with a minimum investment of Rs 20-1,500. (Also read: Post office saving schemes that offer income tax benefits)
Given below are the minimum investment required in different types of post office saving accounts:
| Account name | Minimum 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) Account | Rs 200 |
| Public Provident Fund (PPF) | Rs 500 |
| Senior Citizen Savings Scheme (SCSS) | Rs 1,000 |
(As mentioned on India Post's official website)
Here are the interest rates and premature closure periods provided by different post office saving schemes:
Interest rates on these post office saving schemes move in line with government's interest rates on small savings schemes. Premature closure facility is also available in some of the small saving schemes.
Post office savings account
Investment in post office savings account fetches returns to the tune of 4 per cent. This account can be closed at any time.
Post office Monthly Income Scheme (MIS)
Investment in the post office Monthly Income Scheme (MIS) fetches interest at the rate of 7.6 per cent for the current quarter. The deposit can be prematurely encashed after one year but before three years at a discount of two per cent of the deposit, and after three years, at a discount of one per cent of the deposit. Discount here means deduction from the deposit, according to India Post's website.
Post office Recurring Deposit (RD)
The recurring deposit account offers an interest rate of 7.3 per cent per annum, compounded quarterly. One withdrawal up to 50 per cent of the balance is allowed after one year. However, it should be repaid in lump-sum along with interest at the prescribed rate at any time during the currency of the account, according to India Post.
Post office Fixed Deposit (FD)
The post office fixed deposit account offers interest in the range of 6.9-7.7 per cent for a period of 1-5 years. Premature closure in this case is allowed after 6 months.
Post office Senior Citizen Savings Scheme (SCSS)
The scheme offers an interest rate of 8.6 per cent per annum. Premature closure is allowed after one year on deduction of an amount equal to 1.5 per cent of the deposit and after 2 years 1 per cent of the deposit.