Post Office Schemes Compared: PPF, SCSS, KVP, NSC and SSY
- The comparison
- The three questions that narrow it to one
- Tax, described honestly
- What a rate difference is actually worth
- How they fit together
- Where people go wrong with these five
- Run your own numbers
- Where this fits
Five schemes, five different jobs. They get compared on interest rate, which is the least useful basis, because the rates sit within a narrow band of each other and are revised on the same cycle. What actually separates them is who is allowed to open one, how long the money is locked, and what happens if you need it early.
The comparison
| Scheme | Who it suits | Typical horizon | Premature exit |
|---|---|---|---|
| PPF | Anyone building a long-term, tax-efficient core | Long, extendable in blocks | Partial withdrawal permitted from a specified year, subject to limits |
| SCSS | Retirees wanting regular income | Medium, with an extension option | Permitted with a penalty that varies by how early |
| KVP | A lump sum you want to grow and do not need meanwhile | Defined by the doubling period | Permitted after a lock-in period |
| NSC | A lump sum with a fixed, shorter term | Medium and fixed | Very restricted |
| SSY | A girl child’s education or marriage | Long, tied to her age | Restricted, education withdrawal after a specified age |
⚠ Interest rates, deposit limits, lock-in periods and penalties are set by the issuer and revised, typically each quarter for the rate. This page does not print them, because a number stated today misleads a reader who arrives next year. Take the structure from here and the current figures from the relevant notification.
The three questions that narrow it to one
Are you eligible? SCSS requires you to meet an age or retirement condition. SSY requires a girl child below a specified age at opening. These two rule themselves in or out before anything else is considered, and for most people the field is already down to three.
Do you want income now, or a corpus later? SCSS pays interest periodically, so it is income. PPF, KVP, NSC and SSY accumulate, so they are corpus. This single question separates the retiree’s problem from the accumulator’s, and they are genuinely different problems.
When do you need it? Match the maturity to the year the money is required. A scheme maturing after the need is a scheme that failed, however well it performed.
Tax, described honestly
Three things can be taxed: the contribution, the interest as it accrues, and the maturity amount. The five schemes do not all behave the same way at all three points, and the difference between a scheme whose interest is taxable annually and one whose maturity is exempt is larger than any difference in headline rate.
⚠ This page does not cite provisions or state which scheme falls where. The Income-tax Act, 2025 took effect on 1 April 2026, and the deduction provisions now sit in Chapter VIII, with section 123 covering the category readers know by its earlier number 80C. Beyond that, the treatment of each scheme’s interest and maturity has not been confirmed here from primary source.
The practical instruction: when you compare two schemes, insist on comparing them after tax. A scheme paying a slightly lower rate with exempt interest can beat a higher-paying scheme whose interest is taxable at your slab rate, and the ranking flips depending on whose slab you are in. Comparing headline rates across schemes with different tax treatment is the most common error in this area.
What a rate difference is actually worth
To show why the rate is not where the decision lives: ₹1,50,000 a year for 15 years.
| Annual return | Value after 15 years | Difference |
|---|---|---|
| 7.0% | ₹40,33,000 | — |
| 7.5% | ₹42,12,000 | ₹1,79,000 |
| 8.0% | ₹43,99,000 | ₹3,66,000 |
Assumes contributions at the start of each year and a constant rate throughout, which no administered scheme actually offers. Illustrative only.
A full percentage point over fifteen years is worth about ₹3.66 lakh on ₹22.5 lakh contributed. Real, and smaller than most people expect. Now compare that with the cost of choosing a scheme you cannot exit in the year you need the money, which can be the entire plan.
How they fit together
These are not competitors so much as components.
A working household typically runs PPF as the long core, adds SSY if there is a daughter, and uses NSC or KVP for lump sums that arrive irregularly, such as a bonus, where the money has no specific job for a few years.
A retired household usually runs SCSS for income and holds much less in accumulating schemes, because the horizon that makes them work is no longer available.
What none of these do is grow faster than inflation by a wide margin. They are administered-rate debt instruments and behave like it. Used as the stable part of a portfolio they are excellent; used as the whole of it, they will preserve capital and not much more. What inflation does to a nominal return is worth reading alongside this.
Where people go wrong with these five
Opening the account and not funding it. Several of these schemes require a minimum deposit each year to stay active. Miss it and the account is treated as discontinued, with a fee to revive and, in some cases, interest consequences for the dormant period. This is the single most common avoidable loss in small savings, and it happens because the deposit is annual rather than monthly and nothing reminds you.
Treating the limit as a target. The annual deposit ceiling is a maximum, not a recommendation. Locking your full surplus into instruments you cannot access leaves you borrowing at 14% on a credit card the first time the car needs work. An emergency fund in a savings account earning less is doing a job that no post office scheme can do.
Holding the same scheme in several names without a plan. Deposit limits often apply per depositor rather than per account, so opening a second account does not always double the ceiling. Check before assuming, because excess deposits can simply sit without earning.
Forgetting the nomination. Every one of these accounts takes a nomination and many are opened without one. The cost of that omission falls entirely on the family, at the worst possible time, and fixing it takes ten minutes today.
Run your own numbers
- PPF calculator and post office PPF calculator
- SCSS calculator
- KVP calculator
- SSY calculator
- POMIS calculator
Where this fits
- The two long schemes head to head: PPF or Sukanya Samriddhi
- Where the deduction sits now: NPS or ELSS
- What inflation does: real return after inflation
- Comparing against a fixed deposit: FD calculator