General, Investment, Tax Savers

Various Post Office Saving Schemes

various-post-office-saving-schemes

The Department of Posts offers a large number of investment schemes for the benefit of the public. From the Public Provident Fund (PPF) to the Senior Citizen Savings Scheme (SCSS) to income tax-saving five-year deposits (FD), the investment schemes are many. The interest rates on schemes such as PPF, SCSS, Sukanya Samriddhi Scheme and many others are revised after every 3 months.

Here are the key things to know about the Post Office saving schemes,

1) Post Office savings account

This savings account scheme launched by Indian Post offers an interest rate of 4 per cent on individual/joint accounts. A cheque facility is also available if the account is opened with Rs. 500. Deposits and withdrawals under this scheme can be made through any electronic mode at CBS (Core Banking) post offices. Post Office savings accounts also provides the depositor an ATM facility.

2) Post Office Recurring Deposit Account (RD)

This recurring deposit scheme of Indian Post offers an interest rate of 6.9 per cent per annum (quarterly compounded). There is not any maximum deposit limit.
There is rebate on advance deposit of at least 6 installments. One withdrawal up to 50 per cent of the balance is allowed after one year.

3) Post Office Time Deposit Account (TD)

Interest rates under the Post Office Time Deposit Account are calculated quarterly but paid annualy. Current interest rates on 1 to 5-year deposits are as follows:
1-year account – 6.6%
2-year account – 6.7%
3-year account – 6.9%
5-year account – 7.4%

There is not any maximum deposit limit.
The investment made under the 5-Year Post Office Time Deposit Account also qualifies for the benefit of Section 80C of the Income Tax Act.

4) Post Office Monthly Income Scheme Account (MIS)

The Monthly Income Scheme (MIS) launched by the Indian Post is one of the popular investment scheme in which a person invests a certain amount and gets an assured monthly income as interest. Under the Post Office MIS scheme, the interest is paid on a monthly basis starting from the date of deposit. This scheme is for those persons who want a stable and steady flow of income.

The maturity period of Post Office Monthly Income Scheme is five years.

The scheme can be closed prematurely after one year. A deduction amount of 2 per cent of the deposit will be applicable to the depositor closing the account between 1 year and 3 years after opening. And after 3 years of the date of deposit, 1 per cent will be deducted.

5) Senior Citizen Savings Scheme (SCSS)

Senior Citizen Savings Scheme (SCSS) offered by the Indian Post is one of the most popular scheme in which the senior citizens can get a steady income by investing their money. An individual of the age of 60 years or more can open the Senior Citizen Savings Scheme Account (SCSS) in the Post Office.
The maximum amount in the account should not exceed Rs. 15 lakhs. Maturity period of Senior Citizen Savings Scheme is 5 years. Investment under this scheme also qualifies for the benefit of Section 80C of the Income Tax Act.

6) PPF

PPF is one of the most popular savings schemes for retired persons. Contributions and interest both are tax-free on maturity. Contributions in PPF account up to Rs. 1.5 lakhs in a financial year are eligible for tax deductions under Section 80C of the Income Tax Act. PPF also offers the Investors the benefit of loan facility and partial withdrawal on PPF account, which currently offers a rate of interest of 7.6 per cent.

7) 5-Year National Savings Certificates (NSC)

Currently, National Savings Certificates (NSC) offers an interest rate of 7.6% compounded annually but is paid at maturity. There is not any maximum investment limit in the NSC. Deposits in NSCs qualify for tax rebate under Section 80C of the Income Tax Act.

8) Sukanya Samriddhi Accounts

Sukanya Samriddhi Yojana is a savings scheme launched exclusively for the girl child. Under the Sukanya Samriddhi scheme, a parent can open an account in the name of their girl child until she attains the age of 10 years. The Sukanya Samriddhi account can be opened in post offices and also in some designated banks.

Sukanya Samriddhi Accounts currently offers a rate of interest of 8.1 per cent per annum which is calculated annually but compounded yearly. A maximum amount of Rs. 1.5 lakh can be made in a financial year.

 

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CA Rachit Jain

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