Post office tax saving schemes are safe and secure schemes since they are backed by the Central Govt. of India. These schemes offer a guaranteed rate of return.
These schemes can be purchased all over India and any Indian citizen can invest in Post Office Tax saving schemes.
The Post’s last update was on 1 February 2024. ( before updated 1 October 2023).
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Post office Saving schemes for Tax Benefit
You can save tax by investing in post office tax saving schemes like Sukanya Samriddhi account, Public Provident Fund, National Saving Certificate, Senior Citizen Saving Scheme, and 5 years time deposit also.
Public Provident Fund( PPF)
PPF is a 15-year savings scheme. The minimum deposit is Rupees 500 per year.
A Public Provident Fund offers safe, secure returns for a long tenure. PPF is a great investment scheme for risk-averse investors.
Further, the PPF scheme is good for diversification, the tax benefit to investors (EEE advantage). Since PPF money can not be attached to a court decree, it makes it safer for investors with huge debts.
Moreover, the PPF account becomes a safe haven for senior citizens because of its tax-free withdrawals and guaranteed safe returns.
Any resident Indian can open PPF account for himself on behalf of a minor child or a person of unsound mind of whom he/she is a guardian.
#Joint account is not allowed.
#If you open an account on behalf of minor than minor will operate the account himself when he becomes major.
#Individuals who have GPF or EPF can also open a PPF account.
Public Provident Fund Scheme interest rate is 7.10% per annum.
The annual interest rate is not fixed. However, It is determined by the Central Government of India from time to time. The interest rate is announced on a quarterly basis.
PPF account compounds annually and interest is credited to the account at the end of the financial year.
Sukanya Samriddhi Account
Sukanya Samriddhi Yojana is a government tax saving scheme which was launched as a part of Beti Bachao Beti padhao Yojana for the benefit of the girl child.
Any Indian parents can open SSY account for the girl child.
- The account has a tenure of 21 years.
- You can open the Sukanya Samriddhi Yojana account if your girl child is below age 10.
- The SSY account matures after 21yrs.
- You have to deposit for 15 years from the date of opening of the account.
- The interest rate is 8% annually. The interest rate is revised from time to time.
- You can withdraw partially when the girl child attains age 18.
- The minimum investment is Rupees 250 and the maximum investment is rupees 1.5 Lakh in a financial year.
- SSY Account Offers triple tax benefits.
- The principal amount invested get tax deduction U/S 80 C
- Interest earned is tax-free
- Maturity is also completely tax-free in nature.
| Post office tax saving scheme | Tenure | Interest per annum | minimum investment | maximum investment | Premature closure |
| Public Provident Fund | 15 year | 7.10% | Rs 500 | Rs1,50,000 | Yes |
| National saving certificate | 5 Year | 7.70% | Rs 1000 | No limit | Not allowed |
| Senior Citizen Saving Scheme | 5 Year | 8% | Rs 1000 | Rs 15,00,000 | Yes |
| Post Office Time Deposit (5 Year) | 5 Year | 7.5% | Rs 1000 | No limit | Not allowed |
| Sukanya Samriddhi Yojana | 21 year | 8% | Rs 250 | Rs1,50,000 | Yes |
How to open Sukanya Samriddhi Yojana account
you need to deposit
- SSA account opening form
- Birth certificate of the girl child
- Identity proof of parent
- Residence proof of the parents
Premature closure of Sukanya Samriddhi Account
Premature closure can only be done by a girl child on attaining the age of 18 years for the purpose of marriage expenses.
However, there are some special cases under which the account can be closed and the respective amount can be withdrawn:
The untimely death of the account holder:
In case the registered girl child unfortunately dies, the parents or the legal guardian are eligible to claim the final amount on the account and accrued interest as well.
The amount will be handed over to the nominee of the account immediately.
Also, the parents or legal guardians are required to submit the relevant documents verifying the death of the account holder duly attested by the concerned authorities.
Inability to continue the account:
The Sukanya Samriddhi Account can be prematurely closed if there is any kind of direction from the Central Government regarding the inability of the depository to carry forward the account.
The closure can also be processed in case the contribution towards the account is causing any kind of financial stress to the depositor. Moreover, proper permission from the competent authorities must be generated to process the closure and settlement of the account.
National saving certificate (NSC)
National saving certificate is a 5-year scheme in which you have to deposit the entire amount at one go.
After completion of five years, you will receive the principal along with interest.
The features of post office savings scheme for a tax benefit ( National Saving Certificate)
- The National saving certificate has a tenure of 5 years
- the minimum investment is Rupees 1000
- The certificate can be purchased in one name or jointly.
Senior Citizen Saving Scheme/SCSS
- Any Indian Citizen who is age 60 and above can purchase the scheme.
- Special cases in case of SCSS:
- An investor Who has attained the age of 55 years or more but less than 60 years, and who has retired on superannuation or otherwise (Account has to be opened by such individual within one month of the date of receipt of the retirement benefits).
- The retired personnel of Defence Services (excluding Civilian Defence Employees) shall be eligible to open an account under this Scheme on attaining the age of fifty years, subject to the fulfilment of other specified conditions.
- The interest rate is 8.20% annually.
- Source : https://www.icicibank.com/Personal-Banking/investments/senior-citizens/eligibility.page?#toptitle
- Investment time is for 5 years. Whatever rate is fixed at the time of purchase will remain unchanged during 5 long years.
- You can deposit Rs 30 lac in one name.
- An only quarterly mode Income is available in senior citizen saving scheme.
- Pension dates are 31 March, 30 September, 30 June, 31 December. If you have deposited prior to three months, even then dates are fixed for the pension.
- No special condition to withdraw but the different amount will be released on the basis of your invested time:
- After 1 year: 98.5% of your money (initially deposited amount)After 2 Year: 99% of your money (initially deposited amount)
- Read https://bestinvestindia.com/pmvvy-vs-senior-citizen-saving-scheme/
Post Office Time Deposit (5 Year)
Only Indian residents can open the TD account.
TD account can be opened by an adult for himself, on behalf of a minor or a person of unsound mind of whom he is the guardian
You can also open a joint account by up to 3 adults.
Moreover, You can open more than one account in your name or jointly with another person. You can open accounts by cash or cheque.
In case of cheque, the date of realization of cheque in the account will be the date of account opening.
Any number of accounts can be opened in any Post Office But you will get tax deduction under section 80c for rupees 1.5 Lakh only post office time deposit is also backed by Government of India, therefore, it is a safe investment option with guaranteed Returns.
