5 Post Office Schemes To Park Money For High Returns With Tax Benefits

The Indian government provides a number of post office schemes to meet the needs of different people as per their requirements. The government provides these savings schemes through the Post Office. Beginning of every quarter the government releases interest rates for these savings plans. These schemes are safe and secure and as these schemes are backed by the government at large, also, returns are fixed and guaranteed. These schemes also provide tax advantages in accordance with Section 80C of the Income-tax Act of 1961. NSC, SCSS, SSY, and PPF are a few of these schemes provided by the post office with tax advantages. Here we have picked five of these schemes available for subscription through the post office.

1. Public Provident Fund (PPF)

Public Provident Fund is a long-term savings cum investment scheme by the post office. This scheme can be subscribed with a minimum deposit of Rs 500 and a maximum of Rs 1,50,000 per Financial Year (FY). Deposits to the scheme can be made in a lump sum or in 12 instalments, with a 15-year maturity period. It can, however, be extended for another 5 years within one year of maturity, and so on.

According to the Post Office's official website, it currently offers an annual interest rate of 7.1 percent that is compounded annually. The deposits made under the scheme are deductible from income under Section 80C of the Income Tax Act, and it offers a loan facility beginning with the third FY, through which policyholders can obtain loans for personal use.

 

2. National Savings Certificates (NSC)

NSC is a medium-term saving scheme with a 5-year maturity period. The scheme currently offers an annual interest rate of 7 percent compounded semi-annually but payable at maturity. Unlike PPF, it does not limit the maximum investment because there is no maximum investment limit, however, it has a minimum investment requirement of Rs.1000. The minimum investment amount can be increased with denominations of Rs.100. There is no limit of accounts opened at under this scheme. The deposits qualify for deduction under section 80C of the Income Tax Act 1961.

 

 

3. Sukanya Samriddhi Yojana (SSY)

Sukanya Samriddhi Yojana offered by the Post Office is one of the long-term investment cum saving schemes with maximum deposit tenure up to the completion of 15 years from the date of opening. A Sukanya Samriddhi Yojana account can be opened in the name of a girl child under the age of ten on the day the account is opened. When the girl reaches the age of 18, she will become the account holder. If a girl has twins or triplets, more than two accounts can be opened.

Currently, the interest rate offered on this scheme is 7.6 percent. The scheme can be subscribed with a minimum initial deposit of Rs 250 and a Maximum of Rs 1,50,000 in a financial year. Along with saving this scheme also comes with the advantage of tax exemption under Section 80C of the Income Tax Act 1961.

 

4. Post Office Time Deposit Account (TD)

Post Office Time Deposit Account is a Fixed Deposit offered by the Post Office with 1 Year, 2 Year, 3 years and 5 Year deposit tenure. The investment under a 5-year Term Deposit qualifies for the benefit of section 80C of the Income Tax Act, 1961. There is no cap on the number of accounts that can be opened under the Term Deposit. However, one should that no deposit shall be withdrawn before the expiry of six months from the date of deposit. If the TD account closed after 6 months but before 1 year, the Post Office Savings Account Interest rate will be applicable.

Interest rates From 01 January 2023 to 31 March 2023

Period	Rate
1yr.A/c	6.60%
2yr.A/c	6.80%
3yr.A/c	6.9​%
5yr.A/c	7.0​ %

 

5. Senior Citizen Savings Scheme (SCSS)

SCSS is a senior citizen investment programme backed by the government. The scheme is geared toward seniors having a five-year maturity period. There may only be one deposit in the account, up to a maximum of Rs 15 lakh, in multiples of Rs 1000. If you are 60 years of age or older, you are eligible to invest to receive 8 percent per annum in interest. Investment in this scheme qualifies for tax advantage under Section 80C of the Income Tax Act, 1961.