Post Office Deposits
Savings deposits, recurring deposits, time deposits with maturities of 1, 2, and 3 years, and monthly income accounts, are all included under Post Office Deposits. It enables individuals who make regular deposits to make a fixed monthly deposit for a five-year term and earn returns at fixed deposit rates. Monthly payments for accounts must be at least Rs 100. Any native Indian citizen who is at least 18 years old may open a post office account. Additionally, minors can open and manage the account jointly with their guardian if they are ten years old or older.
- The Saving Account: With a minimum initial investment of Rs. 500, an individual or joint savings account can be opened at the current 4% annual interest rate.
- The Recurring Account: The recurring deposit matures 60 months after the opening date and pays 5.8% annually compounded. Investors are given the option to save monthly with a minimum commitment of Rs 100.
- The Time Deposits: Time deposits at the post office resemble fixed deposits. A Rs 1,000 minimum deposit is needed to start a time deposit. Time deposits for one, two, and three years receive interest at a rate of 5.5%, while those for five years earn interest at a rate of 6.7% annually.
Let’s have a look at current interest rates;
Small Saving Instrument | Interest rates for Q2 (2022-2023) |
Public Provident Fund |
7.1% |
National Saving Certificate |
6.8% |
Sukanya Samriddhi Yojana |
7.6% |
Saving Deposit |
4% |
Term Deposit |
5.5-6.7% |
Recurring Deposit |
5.8% |
Kisan Vikas Patra |
6.9% |
Small Savings Instruments
Small Savings Schemes are a collection of savings instruments run by the federal government. It aims to encourage all residents, regardless of age, to save consistently. They are well-liked because they offer perks such as a sovereign guarantee, tax advantages, and returns that are typically higher than bank fixed deposits. The Finance Ministry has reassessed the interest rates for modest savings plans. The interest rates have been reviewed every three months since 2016. The National Small Savings Fund collects all deposits made through different small savings programs. The central government uses the funds to pay for its budgetary deficit. Small savings programs are created to offer the public secure and alluring investment options while simultaneously mobilizing funds for development.
The programs can be divided into social security programs, savings certificates, and post office deposits.