Post office savings schemes are preferred among millions of household for the safety they offer. However, interest rates on post office savings schemes is not always the very best, when compared to banks and company fixed deposits, but some of them are attractive because they offer tax breaks. Take a look at interest rate on six such schemes.
The best tax savings scheme in the country
PPF is perhaps one of the most popular schemes presently available in the country. The interest rate is 8.7 per cent annually and its important to remember compounding of interest is not done every quarter, so your yield falls. Investment under the scheme qualifies for tax rebate under Sec 80C and the interest earned is also tax free.
Tax benefits under SEC 80C
The interest rate on National Savings Certificate (NSC) is 8.5 per cent compounded six monthly but payable at maturity. Investment in this scheme qualifies for tax rebate under Sec 80C.
Interest rate of 8.4%
The scheme offers an interest rate of 8.4 per cent per annum (quarterly compounded). A deposit of this nature allows individuals to open any number of accounts and the schemes can be transferred from one post office to another.
Interest payable annually
The interest rates are as follows: On a 1, 2 and 3 year Time Deposit in the Post Office an individual gets an interest rate of 8.40 per cent. For a 5 year deposit the same is 8.5 per cent. Accounts can be closed earlier at a discount in case one needs the money in an emergency. Interest is payable annually but calculated quarterly.
An interest rate of 8.4 per cent
This scheme offers an interest rate of 8.4 per cent on a quarterly basis. The scheme can be encashed early and nomination and transfer from one post office to the other is available.
Ideal for Senior Citizens
Under the Senior Citizens Savings Scheme the interest payable is 9.20 per cent per annum, payable from the date of deposit of 31st March/30th Sept/31st December in the first instance & thereafter, interest shall be payable on 31st March, 30th June, 30th Sept and 31st December.