Post Office Savings: Are They Worth It?
Dalal Street Investment Journal|October 11, 2021
When it comes to making investments, most people are attracted by the flashiness of the equity markets and mutual funds. What India Post has to offer is usually ignored. The article takes a deeper look at the various postal savings schemes and compares the risk-adjusted returns to conclude if they are good enough for investors.
Post Office Savings: Are They Worth It?

The prime objective of any investor is to get the best risk-adjusted return on his or her investment. In fact, all investors keep searching for such opportunities. Nevertheless, very few, and especially millennial investors, do not even consider or know that the Indian Post Office also offers various investment opportunities. Consider the fact that the best return provided by traditional post office saving schemes currently is 6.7 per cent through its five-year time deposit offer. Compare this with the fixed deposit rate of 5.3 per cent offered by India’s largest lender, the State Bank of India (SBI), for the same duration. Even the mutual fund category of similar duration i.e. medium to long-duration fund has generated annualized return of 6.05 per cent for the last five years.

This clearly shows that as of now the rate of return offered by instruments from the Indian Post Office is the best. The most beneficial part is that all the post office investment schemes are tax-exempted under Section 80 C i.e. tax exemption of up to ₹1,50,000 is allowed. In a post office saving scheme, your principal and interest are both secured. Your risk on investment is negligible and the returns are also good. These are government-guaranteed schemes and therefore offer the highest security.

Categories of Savings Schemes

Currently there are nine postal saving schemes available for investment by the general public in India, as described below:

This story is from the October 11, 2021 edition of Dalal Street Investment Journal.

Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.

This story is from the October 11, 2021 edition of Dalal Street Investment Journal.

Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.

MORE STORIES FROM DALAL STREET INVESTMENT JOURNALView All
Base Rate Investing: The Smart Investor's Secret
Dalal Street Investment Journal

Base Rate Investing: The Smart Investor's Secret

Base rate investing offers a distinct advantage to investors encouraging them to look beyond the noise and focus on underlying fundamentals and longterm trends. The article explains how by understanding and applying this strategy effectively, you can make informed investment decisions and potentially outperform the market over time

time-read
9 mins  |
March 11, 2024
Back To The 'All is Well' Feeling
Dalal Street Investment Journal

Back To The 'All is Well' Feeling

Domestic indices hit record highs on the back of robust performance in real estate, power, metals and automotive sectors

time-read
2 mins  |
March 11, 2024
Should Commodity Funds Be Part Of Your Portfolio?
Dalal Street Investment Journal

Should Commodity Funds Be Part Of Your Portfolio?

Commodities serve as tangible assets that offer investors a means to engage with the real economy and provide a degree of insulation from financial system disruptions. In this scenario, multi-asset allocation funds represent a more efficient vehicle for commodity exposure compared to hybrid schemes. Here are the details

time-read
8 mins  |
March 11, 2024
Asset Allocation & Diversification
Dalal Street Investment Journal

Asset Allocation & Diversification

Remember, when you diversify your investments, you minimise the chances of suffering from what is known as 'single security risk', or the risk that your investment will fluctuate widely in value with the price of one holding.

time-read
2 mins  |
March 11, 2024
Does AUM Size Matter?
Dalal Street Investment Journal

Does AUM Size Matter?

Investors generally focus on a fund's past returns. They think that a larger fund is better. On the flip side, some investors raise concerns about whether a fund can sustain its strong performance after growing to a substantial size. What is the reality? Rakesh Deshmukh takes a closer look at the scenario

time-read
6 mins  |
March 11, 2024
Ten Commandments of Wealth Creation
Dalal Street Investment Journal

Ten Commandments of Wealth Creation

Financial Planning

time-read
3 mins  |
March 11, 2024
Gold Glitters Amid a Narrow Range Trading
Dalal Street Investment Journal

Gold Glitters Amid a Narrow Range Trading

Over the last two weeks, the commodities market displayed cautious activity with investors trading within narrow margins, eagerly awaiting pivotal economic data and insights from Federal Reserve officials.

time-read
2 mins  |
March 11, 2024
Can Global Equities Sustain the February Momentum?
Dalal Street Investment Journal

Can Global Equities Sustain the February Momentum?

Even though the markets touched new highs in February, they did experience some challenges, notably in the bond sector, which faced difficulties due to an uptick in interest rates.

time-read
2 mins  |
March 11, 2024
"Future outlook of railways and railway wagons industry appears promising"
Dalal Street Investment Journal

"Future outlook of railways and railway wagons industry appears promising"

Umesh Chowdhary Vice Chairman & Managing Director Titagarh Rail Systems Limited

time-read
3 mins  |
March 11, 2024
Metals and Mining: Poised For A Steely Performance
Dalal Street Investment Journal

Metals and Mining: Poised For A Steely Performance

While investors were drawn to the impressive rally in metal stocks, the recent interim budget indirectly bolstered the metals industry with substantial announcements in infrastructure, real estate, defence and railway sectors, which are known for their extensive use of metals. Mandar Wagh explores the future prospects of the industry, analysing financial performance, risks and growth triggers

time-read
6 mins  |
March 11, 2024