Indian investors have long trusted small savings schemes. Also called postal schemes, options such as the Public Provident Fund (PPF) are safe and reliable. There are several reasons for this.
Firstly, these schemes are backed by the Indian government and are considered a sovereign guarantee. This provides a sense of security and trust among investors, particularly those who may be risk-averse or seeking a low-risk investment option.
Secondly, these schemes offer attractive interest rates and tax benefits. The rates are typically higher than bank fixed deposits, making them attractive or long-term savings. Additionally, PPF, NSC, SSY and SCSS allow tax deductions under Section 80C of the Income Tax Act.
Thirdly, these schemes are accessible and convenient. They are provided through a large network of post offices and authorised banks across the country, even in rural areas. This makes it easy for investors to open and maintain their accounts, without the need for a high level of financial literacy or access to internet banking.
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Finally, many of these schemes are best-in-class debt schemes for eligible investors: SSY for girls, PPF for retiral savings, and SCSS for senior citizens. This allows investors to choose the option that best fits their financial goals and risk appetite. Overall, the combination of government backing, attractive interest rates, tax benefits, accessibility, and choice of investment options has made post office savings schemes popular.
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| Small Savings Scheme Instrument | Rates for April-June Quarter | Tenor |
| Senior Citizens’ Saving Scheme | 8.20% | 5 years |
| Sukanya Samriddhi Yojana | 8.00% | 21 years |
| National Savings Certificate | 7.70% | 5 years |
| Public Provident Fund | 7.10% | 15 years |
| Kisan Vikas Patra | 7.50% | 115 month |
| Post Office Savings Account | 4% | – |
| Post Office Recurring Deposit | 6.20% | 5 years |
| Post Office Monthly Income Scheme | 7.40% | 5 years |
| Post Office Time Deposit (1 year) | 6.80% | 1 year |
| Post Office Time Deposit (2 years) | 6.90% | 2 years |
| Post Office Time Deposit (3 years) | 7.00% | 3 years |
| Post Office Time Deposit (5 years) | 7.50% | 5 years |
| Rates applicable for the April quarter only and may be revised for future quarters. |
