Post Office Savings Schemes: PPF vs SCSS - Check comparison between Public Provident Fund and Senior Citizen Savings Scheme

With a vast network over 1.5 lakh post offices across the country, India Post offers a variety of savings schemes for people in urban as well as rural areas, and two of its schemes- Public Provident Fund (PPF) and Senior Citizen Savings Scheme (SCSS), are very popular among nine government-run small savings plans. According to India Post's website - indiapost.gov.in, the 15-Year Public Provident Fund (PPF) and Senior Citizen Savings Scheme (SCSS) currently provide returns of 8 per cent and 8.7 per cent respectively.

Since the 31st March 2019 is the last date to file returns for the income tax return, these two saving plans can be better options for investments to show the savings in the ITR filings. However, a comparison of a few features of PPF and SCSS are given here, according to information available at the India Post website. 

Post office Senior Citizen Savings Scheme (SCSS) 

An individual of 60 years of age or above can open Senior Citizen Savings Scheme account (SCSS) at a post office. Those who of 55 years of age or more but less than 60 years and have taken retirement or under a Voluntary Retirement Scheme (VRS) can also open this account under certain conditions, informs the website.

In the SCSS account, there can be only one deposit in multiple of Rs 1,000 and the maximum amount should not exceed Rs 15 lakh.

The SCSS account, which has a maturity period of five years, can be extended for another three years within one year of maturity. The SCSS account earns interest at the rate of 8.7 per cent per annum, which is payable from the date of deposit on March 31/September 30/December 31 in the first instance, and then interests are payable on March 31, June 30, September 30 and December 31.

Notably, premature closure is also allowed after one year on deduction of an amount equal to 1.5 per cent of the deposit. However, if you for premature closure of SCSS after two years, an amount equal to one per cent of the deposit would be deducted.

Post office Public Provident Fund (PPF)

An individual can open PPF account with an amount of Rs 100, but he/she must deposit at least Rs 500 in a financial year and maximum up to Rs 1,50,000, said India Post website. The PPF account can be opened with cash or cheque.

The PPF accounts which mature in 15 years can be further extended for one or more blocks of five years each after an application. The PPF account fetches an interest rate of 8 per cent per annum which are compounded on an annual basis.

Notably, premature closure is not allowed in PPF account before 15 years.

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India Post offers interest rates of 4-8.7 per cent on its small savings schemes, including time deposit, recurring deposit, monthly income scheme, Kisan Vikas Patra and Sukanya Samriddhi.