India Post or Department of Posts, which runs postal services in the country, offers nine types of small saving schemes. These schemes carry the least risk among all investment options as they are recognized and validated by the government.

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Interest rates on these savings schemes move in line with the government's interest rates on small savings schemes, which are reviewed on a quarterly basis.

In the current scenario, where bank FD interest rates are falling, conservative investors must be looking for alternatives that offer better interest and guaranteed return. These small savings schemes should be considered by such investors, say experts.

Here are the 9 small savings schemes offered by post office:

Savings Account

The post office currently offers 4 percent interest per annum on individual/joint savings accounts. The minimum balance to be maintained in a saving account is Rs 500. If this balance of Rs 500 is not maintained, a maintenance fee of Rs 100 is deducted from the account on the last working day of each financial year and after deduction of the account maintenance fee, if the balance in the account becomes nil, the account stands automatically closed.

Recurring Deposit (RD)

In the case of RD, a minimum of Rs 100 per month or any amount in multiples of Rs 10 is required. There is no maximum limit on investment. It offers an interest rate of 5.8 percent for the current quarter. The maturity period of the post office RD account is 5 years. An account can be extended for further 5 year by giving application at account office, according to India Post.

Monthly Income Scheme (MIS)

The maximum investment limit in case of MIS is Rs 4.5 lakh in single account and Rs 9 lakh in joint account. The investments should be done in multiples of Rs 1,000. It currently offers 6.6 percent interest rate, which is payable monthly.

Fixed Deposit or Time Deposit Scheme

The time deposits of one-year, two-year and three-year maturity periods fetch interest at the rate of 5.5 percent. The five-year time deposit account offers a return of 6.7 percent and it qualifies for the benefit of Section 80C of the Income Tax Act, 1961.

Public Provident Fund (PPF)

The scheme offers an interest rate of 7.1 percent per annum, which is compounded yearly. The maturity period is 15 years but the same can be extended within one year of maturity for a further 5 years and so on. Deposits qualify for deduction from income under Section 80C.

National Savings Certificate (NSC)

National Savings Certificates or NSCs fetch an interest rate of 6.8 percent per annum. This interest is compounded annually but payable at maturity. Deposits in the National Savings Certificate qualifies for deduction under Section 80C of the Income Tax Act.

Senior Citizen Savings Scheme

Senior Citizen Savings Scheme (SCSS) serves as an investment avenue and helps in generating wealth for a successful retirement life. A person of the age of 60 years or more is eligible for the scheme. The scheme offers an interest rate of 7.4 percent per annum, which is payable from the date of deposit on March 31/September 30/December 31 in the first instance and thereafter, interest are payable on March 31, June 30, September 30 and December 31. Investment under this scheme qualifies for the benefit of Section 80C.

Kisan Vikas Patra (KVP)

KVP offers an interest rate of 6.9 percent, which is compounded annually. The amount invested doubles in 124 months. The minimum amount to be invested is Rs 1,000 in multiples of Rs 100.

Sukanya Samriddhi Account

It offers an interest rate of 7.6 percent, which is calculated on a yearly basis. The minimum amount required to be invested is Rs 250 and maximum stands at 1,50,000 in a financial year. There is no limit on number of deposits either in a month or in a financial year.

Disclaimer: CNBCTV18.com advises users to check with certified experts before taking any investment decisions.

First Published:Aug 13, 2020 12:53 PM IST