Post office schemes best option for safe, guaranteed returns

Debt funds better route for those looking at longer investment tenures

As banks cut their deposit rates, post office savings schemes are the only option for investors seeking guaranteed returns on their investments. But if you are willing to take some risk, debt funds can be a better option. 

For short-term investors, post office savings schemes (POSS) have the potential to offer returns on a par with or higher than fixed deposits (FDs), without any penalties on withdrawal. For long-term investors, these are a more tax efficient route.

Interest rate on State Bank of India’s (SBI’s) five-year fixed deposit is at an 11-year-low and fetches 6.5 per cent. The one-year deposit has fallen