Post Office Saving Schemes: Its Benefits & How To Start

byDilip PrasadLast Updated: February 16, 2024
Post Office Saving Schemes: Its Benefits & How To Start

Post Office Saving Schemes offer individuals a range of secure and reliable investment options provided by the Indian Postal Service. These schemes provide attractive interest rates and numerous benefits, making them popular among individuals seeking financial stability and long-term savings. In this article, we will explore the benefits of Post Office Saving Schemes and provide a step-by-step guide on how to start investing in these schemes, helping individuals make informed decisions about their savings and achieve their financial goals.

What is Post Office Savings Scheme?

Post Office Saving Schemes refer to a range of investment options provided by the Indian Postal Service, allowing individuals to securely save and invest their money. These schemes offer attractive interest rates and a variety of benefits, making them a popular choice for those seeking reliable and accessible financial avenues. Whether for short-term or long-term goals, Post Office Saving Schemes provide individuals with diverse options to effectively manage and grow their savings.

Types of Post Office Savings Schemes 

There are various investment schemes that are qualified for tax deductions under the government. Listed below are a few types of schemes that you can avail of: 

  • Post Office Savings Account (SB): This is similar to any other savings account of a bank. The account is transferable in nature, an adult or a minor can open this account and receive a 4% interest rate. 
  • National Savings Recurring Deposit Account (RD): It is a monthly investment scheme with a tenure of 5 years and offers a 5.8% per annum interest rate. This scheme is ideal for small investors and requires a minimum deposit of INR 100 per month. 
  • Senior Citizens Savings Scheme Account (SCSS): Post Office Senior Citizen Savings Scheme is meant for any Indian resident, over the age of 60. A person who has taken voluntary retirement, post 55 years of age, can also open this account and receive the matured amount after 5 years. However, the tenure can be extended for 3 more years at the interest rate of 8.2% per annum.
  • Public Provident Fund Account (PPF): This investment plan is meant for Indian adults, in which the minimum deposit required is INR 500 and the interest rate is set at 7.1%. It is a long-term scheme with many tax benefits.
  • Sukanya Samriddhi Account (SSA): For the empowerment of girl children in India, this special scheme has been introduced, with a 7.6% rate of interest. The minimum deposit amount for this must be INR 250.
  • Kisan Vikas Patra (KVP): You can invest in this scheme by visiting a post office, it offers an interest rate of 7.5% and the minimum deposit amount is INR 1,000. This certificate offers you the facility of closing your account prematurely after 2.5 years.

There is no tax deduction on the principal amount invested and interest on the KVP is also taxable. Kisan Vikas Patra scheme is thus not tax-efficient. It works for new and small investors from remote areas who do not have access to other financial products.

Benefits of Investing in Post Office Small Savings Schemes

Investing in Post Office Saving Schemes comes with numerous advantages. The process is easy, and investors can benefit from attractive interest rates and tax deductions. Let’s explore some of the key benefits:

  • Variety of schemes: There are multiple different types of PO schemes to cater to the requirements of various investors. These schemes have varied deposit limits, tax implications and returns. An investor can purchase schemes according to his/her specific requirements.
  • Easy enrollment: To make an investment in any PO schemes, minimal documentation is required. The entire procedure is easy, hassle-free and best suited for both urban and rural investors.
  • Long-term investment: One can invest money in long-term PO schemes that gives them a chance to save more and achieve financial goals. For example, the tenure of the PPF investment scheme is 15 years.
  • Wider reach: Post offices, in contrast to most banks, have a greater reach and are easier to access for even the most underprivileged individuals in society. 
  • Risk-free investment with a good interest rate: PO schemes are backed by the government and are risk-free in nature. The interest rate offered by most of these schemes is highly competitive, under the range of 4% and 8.2%. 
  • Tax benefits: Under Section 80C of the Income Tax Act 1961, most PO schemes offer tax exemptions. Some schemes like Sukanya Samriddhi Yojana, PPF, etc. offer a tax rebate over the interest earned.

Also Read: Short Term FD Vs Long Term FD

Who Can Open Post Office Savings A/C?

The eligibility criteria depend on the type of account you choose. Some of the general requirements are:

  • Beneficiary must be an Indian adult
  • A minor must be at least 10 years old
  • A bona fide guardian of a minor can open an account
  • 2-3 individuals can have joint accounts
  • A beneficiary can be someone who is not mentally sound
  • For non-general schemes, the eligibility depends on the beneficiary’s earnings, work type, age, etc

How to Open Post Office Savings A/C? 

Listed below are the steps investors must follow to apply for any Post Office Savings Schemes:

Step 1: Visit your nearest post office branch

Step 2: Get the SB-AOF Indian Post Office Account Opening form. You can also download the form from the official website of the Indian Post.

Step 3: Fill up the form by providing all correct information, such as the PO scheme you are applying for, the initial deposit amount, ID proof, address proof, etc. and then submit it with the KYC evidence and other necessary documents. 

Step 4: Now complete the process by depositing the amount as per the selected PO scheme.

What Are the Documents Required to Open Post Office Savings A/C?

To open a Post Office Savings Account, you typically need the following documents:

  • Identity proof: Any valid government-issued identity proof such as Aadhaar card, PAN card, passport, voter ID card, or driving license.
  • Address proof: Documents like Aadhaar card, passport, ration card, utility bills (electricity bill, water bill, etc.), bank statements, or rent agreement can be submitted as address proof.
  • Passport-size photographs: Usually, two to four recent passport-size photographs are required to be submitted along with the application form.
  • KYC (Know Your Customer) documents: In some cases, additional KYC documents may be required, such as a self-attested copy of your PAN card or a declaration form.

It’s important to note that the specific document requirements may vary depending on the rules and regulations of the particular Post Office or the jurisdiction in which you are opening the account. It’s advisable to contact your local Post Office or check their website for precise details on the documents required for opening a Post Office Savings Account.


Individuals seeking low-risk investments with reasonable returns can consider investing in Post Office Savings Schemes. These schemes provide a range of advantages and offer attractive fixed interest rates to investors. With minimal financial risk and affordable minimum investment amounts, they are a popular choice among individuals with lower income, senior citizens, and other risk-averse investors.


What are the small saving schemes in a post office?

National Savings Recurring Deposit Account (RD) and National Savings Certificate (NSC) are some Post Office Small Saving Schemes.

Can Post Office Savings Scheme money withdrawal be done from any post office in India?

Yes, from the post office account, an investor can withdraw money from any post office located in any part of the country.

What is the ‘PM CARES for Children Scheme’ under Post Office Savings Scheme?

Due to the COVID-19 pandemic, if a child has lost both parents or the last surviving parent then an account will be opened in the child’s name and a lump-sum amount will be paid from the PM CARES fund.

Will I have to pay a fee for opening a Post Office Savings Scheme account?

No additional fees will be charged for opening a Post Office Savings Scheme account. The investor will only need to pay the deposit amount and have to submit the required documents. However, you will be charged for a duplicate passbook, cheque book and account transfers.

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