Are you looking to invest in a safe financial instrument for a long term investment? Besides fixed deposit (FD), bonds or debt mutual funds, one can invest in a post office small savings scheme. Among all these options, one of the popular small savings scheme is public provident fund (PPF).
Investment in public provident fund offers 7.1 percent per annum to investors. The minimum investment one can make is ₹500 and the maximum is ₹1.5 lakh per annum.
Investors are allowed to opt for one withdrawal during a financial year after five years excluding the year of account opening. This means if an account was opened during 2010-11, the withdrawal can be taken during or after 2016-17. The amount of withdrawal can be taken up to 50 per cent of balance at the credit at the end of 4th preceding year or at the end of preceding year, whichever is lower.
However, one can decide to invest in other small savings schemes such as given below.
Post office savings account: It offers 4 percent interest per annum. The minimum amount that one can invest is ₹500 to open the account.
National Savings Recurring Deposit: It offers 6.7 percent interest on deposits. The minimum contribution to recurring deposit is ₹100 per month.
National Savings Time Deposit: One can open a National Savings time deposit by depositing a minimum of ₹1,000. There are four tenures of this deposit.
1-year-time deposit: It gives 6.9 per cent interest per annum
2-year time deposit: It offers 7 per cent interest per annum.
3-year time deposit: This offers 7.1 percent per annum.
5-year time deposit: This offers 7.5 per cent per annum.
National Savings monthly income account: This account offers 7.4 per cent per annum payable monthly. The minimum one can invest in this scheme is ₹1,000.
Senior Citizen Savings Scheme: This scheme offers 8.2 percent interest per annum. And one can make a deposit of ₹1,000 and maximum upto ₹30 lakh.
Sukanya Samriddhi Account: One gets to earn 8.2 percent per annum. One can invest anywhere between ₹250 to ₹1.5 lakh in one year.
| Small Savings Scheme | Interest (%) |
| Public Provident Fund Scheme | 7.1 |
| Post Office Savings Account | 4.0 |
| 1 Year Time Deposit | 6.9 |
| 2 Year Time Deposit | 7.0 |
| 3 Year Time Deposit | 7.1 |
| 5 Year Time Deposit | 7.5 |
| 5 Year Recurring Deposit Scheme | 6.7 |
| Senior Citizen Savings Scheme | 8.2 |
| Monthly Income Account | 7.4 |
| National Savings Certificate | 7.7 |
| Kisan Vikas Patra | 7.5 |
| Mahila Samman Savings Certificate | 7.5 |
| Sukanya Samriddhi Account Scheme | 8.2 |
(Source: indiapost.gov.in)
National Savings Certificate (VIIIth issue) (NSC): One gets to earn 7.7 percent compounded annually but payable at maturity on NSC. The minimum investment is ₹1,000 and in multiples of ₹100. There is no maximum limit.
Kisan Vikas Patra: It offers 7.5 percent compounded annually. The minimum investment is ₹1,000 and in multiples of ₹100 while there is no maximum limit.
Mahila Samman Savings Certificate: This scheme offers an interest of 7.5 percent per annum. The deposit can be made for an amount between ₹1000 and ₹2 lakh.
