Price of a guarantee

Post Office of India has a scheme where they give you around Rs. 1000 a month if you deposit with them Rs. 1,50,000. It is around 8.5% interest per year. If you put the same money in the stocks at the same time as you hand it over to the post office, the worst of mutual funds nowdays give 15% returns in an year i.e. around Rs. 1800 per month instead of Rs. 1000.

Why does the Post Office do this?

Its the price of a guarantee. Post Office pledges you that they will keep your money safe and give you 1000 per month irrespective of the market conditions. Thats their Price of a Guarantee.