Post Office Saving Schemes
Post office schemes like MIS – Monthly Income Scheme, RD – Recurring Deposit, NSC – National Savings Certificate are one of the oldest forms of investments available. Each scheme is different and one should not invest blindly without understanding its pros and cons
Pros
- Ultimate safety since schemes are run by the government
- A steady stream of the interest income (monthly/quarterly/half-yearly) in some schemes
- Certain schemes are for specific age group, like Senior Citizens Saving Scheme (SCSS) and Sukanya Samriddhi Yojana
Cons
- Interest earned is taxable in the hands of investor
- Present rate of return is in the range of 7.50% – 8% which is comparatively low when compared to other investment options
- There is no certainty that rate of interest will continue throughout the tenure of scheme since it is subject to quarterly review by government
Post office schemes are suitable for those investors who are risk averse and are not willing to risk their hard earned money.