Post Office Savings Schemes are the schemes offered by IndiaPost, an Indian Government-backed postal services organization. The popularity of the post office schemes is due to its offering of risk-free returns on investments. The long tenure investment schemes or the schemes with the longer maturities offered by Post Offices help the individuals to save for their long term financial goals. Investments made for long tenure also provide higher returns by the way of yearly compounding benefits i.e in cumulative investment schemes, investors get the benefit of earning interest or returns also on the interest accumulated from the yearly compounding.
Best Long Tenure Post Office Saving Schemes
Some of the best schemes with long maturities offered by Post Office are:
- Public Provident Fund (PPF): Public Provident Fund is a long tenure investment product with a maturity of 15 years which can be further extended to 5 more years. This is one of the safest & best options for an investment to meet long term financial goals.
Under the scheme, every year minimum deposits of Rs.500 (& maximum of 1.5 lacs in an FY) need to be made for 15 years in the form of a lump sum or monthly instalments.
The scheme offers a high risk-free interest rate of 7.1% which is compounded annually. PPF falls under the EEE category in terms of taxation where deposits, interest earned & withdrawals are exempt from taxes.
- Sukanya Samriddhi Yojana (SSY): Sukanya Samriddhi Yojana is a savings scheme exclusively made for the girl child to help her meet the educational & marriage expenditures. The scheme encourages the parents of girl children to make savings & investments for ensuring financial security & a brighter future of their child.
The scheme has a long maturity of 21 years from the date of issue. The account can be opened before the girl turns 10 and premature withdrawals would be allowed only for education or for marriage(when the girl turns 18). Under the scheme, a lump sum or any number of instalment investments with a minimum of Rs.250 needs to be made by parents every year for the first 15 years. The scheme offers a higher interest rate of 7.6% p.a. which is compounded annually. Also, investments in SSY are eligible for claiming tax deductions of up to Rs.1.5 lacs in a financial year under section 80c. The interest earned & the amount at the maturity are exempt from taxes.
- Kisan Vikas Patra (KVP): Kisan Vikas Patra is a certificate small saving scheme that is designed in a way to double the investment amount made by the investors in a pre-defined time period. Currently, the maturity period of the investments made in KVP is 124 months/ 10 years 4 months with the interest rate of 6.9% which is compounded annually.
Earlier, The scheme was exclusively launched for farmers but later it was open for all to invest. The scheme is one of the best options for preparing for a long term financial goal given its long investment tenure and sovereign guarantee on the investment by the Indian Government.