The Government of India sets the interest rates for post office deposit schemes periodically. Rest assured, these investment plans offered by India Post come with guaranteed returns and are free from any kind of risk. The interest rates on post office FDs vary from 6.80 per cent pa. to 7.50 pa., providing investors with consistent growth. The National Savings Institute, a division of the Department of Economic Affairs of the Union Ministry of Finance, administers these schemes offered by India Post.
Here’s a look at the various schemes available:
1) Post Office Savings Account: This savings bank account offers an interest rate of 4 per cent per annum. Keep in mind that the interest is fully taxable, but no TDS (Tax Deducted at Source) will be deducted.
2) 5-Year Post Office Recurring Deposit Account (RD): With a fixed tenor of 5 years, you can make monthly deposits starting from Rs 100 and earn interest at a rate of 6.5 per cent p.a. The interest is compounded quarterly.
3) Post Office Time Deposit Account (TD): This is similar to a bank fixed deposit, with tenors ranging from 1 year to 5 years. The interest is calculated quarterly but paid out annually. Here are the interest rates for Q2 FY 2023-24 (July to September 2023): 6.9 per cent for a one-year account, 7 per cent for two- and three-year accounts and 7.5 per cent for a five-year account.
4) Post Office Monthly Income Scheme Account (MIS): A low-risk investment scheme that provides regular monthly income through interest payments. The current interest rate is 7.40 per cent p.a., and there is a lock-in period of five years.
5) Senior Citizen Savings Scheme (SCSS): This government-backed retirement scheme allows lump sum deposits. The interest rate for Q2 FY 2023-24 is 8.2 per cent, payable quarterly.
6) 15-Year Public Provident Fund Account (PPF): A popular investment and retirement tool for many salaried individuals. PPF offers income tax deductions up to Rs 1.5 lakh per financial year under Section 80C. The interest rate is 7.1% p.a., compounded annually, and the interest earned is tax-free.
7) National Savings Certificates (NSC): With a tenure of five years, NSC offers an interest rate of 7.7 per cent p.a., compounded annually, and paid out at maturity.
8) Kisan Vikas Patra (KVP): Investing in KVP will double your amount in 123 months. The current interest rate stands at 7 per cent per annum.
9) Sukanya Samriddhi Accounts (SSA): Designed for girl children below the age of 10 years, SSA offers an interest rate of 8 per cent p.a. The interest is calculated yearly and compounded annually.
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