The Post Office Saving Schemes as the name says is not a single scheme instead it includes a list of schemes that provide risk-free and reliable returns on the investment. These returns and securities are the perks that an investor associated with the central government's various savings portfolios.
The Post Office Schemes are available across all the post-offices of India. One of the most prominent examples of these schemes is PPF, which is operated in public sector banks’ 8200 branches as well as the post-offices in every Indian city.
The savings schemes that are included in Post Office Saving Schemes are:
This scheme has various tenure options for the investment. The current rate as per the tenure is mentioned in the below table:
|Tenure||Rate of Interest (Jan - March 2019)|
The minimum amount that one can invest in this scheme is Rs.200 with no upper limit. Moreover, there is no restriction on the number of accounts that one can have under this scheme. An account holder can transfer his/her account from one post office to another and there is a facility of joint account as well. As soon as the tenure of the time deposit matures, the same tenure is automatically renewed for a similar tenure. The tax benefits are provided for the investments that are made for five years under Section 80C of the Income Tax Act.
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It is basically a monthly saving scheme for five years that provides the interest at the rate of 7.3% yearly, which is quarterly compounded. Upon completion of five years, the Recurring Deposit account upon the investment of Rs.10, 000 every month will accumulate Rs.7, 25, 051. This scheme allows even the smallest investment of Rs.10/ month and any amount but it has to be in the multiples of Rs.5 with no upper limit on the investment. This Post Office Saving Scheme charges 5 paise on every Rs.5 if one misses any monthly investment. An account holder can transfer his/her RD from one post office branch to another and joint accounts are also available under this scheme. After one year of investment, one can withdraw up to 50% of the amount available in his/her RD account.
Thus account works in the same way as of the savings accounts of banks with a difference that it is held with the post office. However, an individual can open only one account with one post office but can transfer an account from one post office to another. The rate of interest that is available with this account is 4% and it is completely taxable with no TDS deduction.
It is a unique scheme that provides fixed monthly income over the investment that is made by the investors. Any Indian resident can open an account under this scheme as an individual account holder or in joint. This Post Office Saving Scheme offers an interest rate of 7.7%/ yearly with a maturity period of five years. This account can be opened for a minor as well and if a minor is more than 10 years, then he/she can also operate his/her account.
It is a long-term investment plan with an investment period of 15 years and it currently provides 8% interest/ year that compounds on a yearly basis. The minimum investment that one can do in his/her PPF account is Rs.500 which can go to Rs.1 lakh 50 thousand in one financial year. One can do the investment in a lump sum or in equal installments for 12 months. The maturity period for PPF account is 15 years and one can extend it into five years upon completion of the 15 years period. In addition to this, an account holder can keep extending the maturity period in the block of five years. In this way, PPF is originally a long term plan for investment that provides the premature closure facility in five years only in case of higher education or some serious ailments. The facility of partial withdrawals is also provided after completion of five years from the year in which the PPF account is being opened. The facility of loan is also provided against PPF from the third and sixth year of opening the PPF account. The investments made for PPF account are eligible to get tax exemption under Section 80C of the Income Tax Act. The interest provided on PPF balance are also tax-free, but one has to provide the details of PPF interest in his/her ITR.
The minimum age to take this Post Office Senior Citizen Saving Scheme is 60 years and one who has taken the voluntary retirement after the age of 55 years is also eligible to open this account within the month he/she starts receiving the benefits of retirement. The investment amount in this scheme must not exceed the corpus value that one gets on retirement. One can open the joint SCSS account with his/her spouse. The maximum allowed limit of the investment is Rs.15 lakh per individual and the amount of investment can be a multiple of Rs.1000. Currently, the rate of interest provided under this scheme of Post Office is 8.7% per year that is payable on every first working day of every quarter. The maturity period for the deposit in this scheme is five years. The facility of premature withdrawal is also allowed after one year of deposit with a 1.5% penalty. However, a penalty of 1% is applied after completion of 2 years. After the maturity of the scheme, the account can be extended for three years. The investments can get tax exemption under Section 80C of the Income Tax Act. However, if the interest amount becomes more than Rs.10, 000, and then the tax is deducted at the source.
The maturity period of this Post Office Saving Scheme is five years. The rate of interest provided by this scheme is 8% yearly that compounds in half-year, but it is payable at maturity only. One can purchase an NSC certificate on behalf of a minor or for self. The investments made under this scheme are eligible for a tax deduction as per Section 80C of the Income Tax Act. In addition to this, the NSC can be transferred from one person to other but during the tenure of investment.
This Post Office Saving Scheme is for the betterment of the girl child. This scheme provides 8.5% interest rate per year and it is compounded yearly. The minimum amount that one can invest in this scheme is Rs.250 and its maximum allowed limit is Rs.1, 50, 000 in one financial year. One has to invest at least 15 years regularly after opening this account. In this way, the account will continue earning interest until the maturity. The investments that one makes towards Sukanya Samriddhi Yojana are eligible to tax exemption under Section 80C of the Income Tax Act (up to Rs.1.50 Lakh per year). In addition to this, the interest gained on this account as well as its maturity amount is tax-free. The investment one makes towards Sukanya Samriddhi Yojana matures after 21 years from the date of opening of the account or on the marriage of the child after she attains the age of 18 years.
The interest rate that is earned on Kisan Vikas Patra is 7.7% which is compounded on an annual rate. One can purchase a Kisan Vikas Patra from any Post Office. The amount invested in this account doubles after every 9 years 4 months. One can easily transfer Kisan Vikas Patra. The encashment facility of these certificates can be availed after two and a half years of the investment. The Kisan Vikas Patras does not attract any kind of tax deduction and the interest earned on them is as well taxable.
The table below shows the interest rates applicable to various savings schemes are as under:
|The List of Schemes||Frequency of Compounding||Rate of Interest|
|1-year Time Deposit||Quarterly (The annual interest Rs 561 on deposit of Rs 10,000)||5.5|
|2-year Time Deposit||Quarterly (The annual interest Rs 561 on deposit of Rs 10,000)||5.5|
|3-year Time Deposit||Quarterly (The annual interest Rs 561 on deposit of Rs 10,000)||5.5|
|5-year Time Deposit||Quarterly (The annual interest Rs 687 on deposit of Rs 10,000)||6.7|
|Post Office Savings Account||Yearly||4.0|
|Five Years Post Office Recurring Deposit Account||Quarterly||5.8 The maturity value for Rs 100 Dn. Five years will be 6969.7 After the extension with the deposit 6 year: 8620.98 7 year: 10370.17 8 year: 12223.03 9 year: 14185.73 10 year: 16264.76|
|Monthly Income Account||Monthly and Paid||6.6 (The monthly interest Rs 55 on deposit of Rs 10,000)|
|Public Provident Fund||Yearly||7.1|
|Senior Citizen Savings Scheme||Quarterly and Paid||7.4 (The quarterly interest Rs 185 on deposit of Rs 10,000)|
|National Savings Certificate||Yearly||6.8 (Maturity value Rs 1389 for the deposit of Rs 10,000) The accrued interest for IT for Rs 10,000 Dn. 1st year: Rs 68.0 2nd year: Rs 72.62 3rd year: Rs 77.56 4th year: Rs 82.84 5th year: Rs 88.47|
|Sukanya Samriddhi Account||Yearly||7.6|
|Kisan Vikas Patra||Yearly||6.9 (Matures within 124 months)|
Note: The rate of interest mentioned above is with effect from April 1, 2020, to 31 December 2020 and have been taken from the official website of the Indian Post.
The postal chain of the nation is controlled by the Indian Post and also provides various deposit avenues for the investors that are popularly referred to as the post office saving schemes. These schemes have been introduced primarily to provide the investment avenue and also inculcate the discipline of savings among the Indians coming across from various economic backgrounds.
Any investor who is looking forward to the no-risk investment portfolio and substantial return generation should opt to consider opting for the post office saving schemes. The saving parkways such as the Public Provident Funds, Sukanya Samriddhi Accounts, National Savings Certificate, and so on comes up with negligible financial risk and an attractive rate of interest. The minimum sum of investment is pocket-friendly, which makes it an ideal investment avenue even for those belonging from a lower economic class to invest in such schemes.
Now let us take you through the easy steps of applying for any of the post office saving schemes listed below:
|Senior Citizen Savings Scheme||Rs 1000|
|SB (Cheque account)||Rs 500|
|Public Provident Fund||Rs 500|
|SB (Non-cheque account)||Rs 50|
|MIS Post Office Scheme||Rs 100|
|The NSCs’ (VIII Issue)||For the certificated that were issued either 01 November 2011 or after with the maturity term of-years. No premature encashment will be possible|
|Various Savings Accounts|
|Senior Citizen Savings Scheme||After one-year premature closure|
|RD||After three-years premature closure is permitted, however, only the SB rate will be permissible|
|SB||Closed at any point in time|
|TD||After six months premature closure is permissible|
|MIS Post Office Scheme||After one-year premature closure is permissible|
These are some of the best government made Post Office Saving Schemes that an eligible individual can purchase from the Post-Office. These schemes are considered the safest investment mediums for the general public of India. The reason for the same is most of these schemes provide good returns. The easy purchase and management of these schemes make them good to go for all.
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