Indian Post Office proposes many investment schemes for different types of investors. Individuals can get a good amount of returns on their savings through Post Office Saving Scheme. These schemes offer 7.1 percent interest per annum.
If you are planning to invest your money you must check the 15-year Public Provident Fund Account (PPF) scheme at the Indian Post. The government of India supports the Post Office schemes so there is a guarantee of returns of your money.
Investing your money in a Post Office scheme is a beneficial and trustworthy idea. This scheme comes under the Government scheme and also offers good interest on your money.
To avail below facilities on your Post Office Savings Account, kindly download and submit the respective form at the concerned Post Office-
Atal Pension Yojana (APY)
Pradhan Mantri Suraksha Bima Yojana (PMSBY)
Pradhan Mantri Jeevan Jeevan Jyoti Bima Yojana (PMJJBY)
There are many schemes available at the post office such as RD, TD, MIS, SCSS, PPF, NSC, KVP, SSA. In this article, we are going to cover up the details of different Post Office Saving Schemes. Let’s take a look at Post Office Saving Schemes.
1. Post Office Savings Account
The Post Office Savings Account is one of the schemes of the Post Office Saving Scheme. This scheme offers a fixed interest rate on the amount you invested. The minimum investment amount for opening savings account in the post office is Rs. 20.
The rates of the post office savings account scheme is equivalent to the bank savings account. The post office saving scheme interest rate is about 4% and the interest is calculated every month. An individual can withdraw their balance anytime they need.
2. Post Office Recurring Deposit Account (RD)
Post Office Recurring Deposit Account (PORD) allows individuals to save on a monthly basis. This scheme is a small savings scheme that has 60 monthly installments. This scheme is appropriate to save through regular monthly sediments. The minimum age criteria for opening an account is 18 years.
Parents or guardians can open accounts on behalf of their minor children. The interest rate of this scheme is about 5.8% per annum. Individuals can also calculate the returns using Post Office Saving Scheme Calculator. One cannot prematurely withdraw their post office RD investments.
3. Post Office Time Deposit Account (TD)
Post Office Time Deposit Account (POTD) is one of the favored schemes among post office saving schemes. The interest rate of this scheme is based on the earnings of government securities. The time deposits can be repositioned from one post office to the other office.
The minimum requirement for opening a fixed deposit account is Rs. 1,000. You can open Time Deposit Account for one year, two years, three years, and five years terms. Investors can claim tax benefits up to INR 1.5 lakhs per annum. They can claim the tax benefit when they file income tax returns.
4. Post Office Monthly Income Scheme Account (MIS)
Post Office Monthly Income Scheme (POMIS) offers standard monthly income to the receiver in interest payments. This scheme has a lock-in period of five years. The rate of interest of this scheme is 6.60%. The interest rate is not fixed for this scheme. The interest rates are announced every quarter.
The minimum amount for POMIS is Rs. 1,500, and the maximum limit is Rs. 4,50,000 per individual. For a joint holding account, the maximum limit is Rs. 9,00,000. This post office saving scheme allows early withdrawals post one year of account opening. But these premature withdrawals have penalties.
5. Senior Citizen Savings Scheme (SCSS)
Senior Citizen Savings Scheme is appropriate for senior citizens. This scheme offers regular income and safety for individuals. The minimum asset amount is Rs. 1,000 and a maximum of Rs. 15,00,000.
The interest rate for this scheme is modified every quarter. The present interest rate for SCSS is 7.40%. This post office saving scheme has a five-year lock-in period. The claim revenue of the post office saving scheme is taxable.
SCSS allows individuals to withdraw their assets prematurely but these withdrawals are subject to penalties. Withdrawals within two years are subject to a penalty of 1.5% on the investment. For withdrawals after two years of account opening, the penalty is 1% on the deposit amount. In case of the death of the individual before the account maturity, the account shall be closed.
6. Public Provident Fund Account (PPF)
Public Provident Fund Account (PPF) scheme was launched by the National Savings Institute in1968. The interest rate of this scheme is 7.1%. The premature closure of PPF accounts is only authorized in certain conditions.
PPF assets have a fixed term of 15 years. This means once you invested, the investment is locked in for a period of 15 years. Individuals can withdraw at the end of 5 years. They can withdraw only 50% of the balance of the initial year.
Investment up to Rs. 1.5 lakhs can be claimed as tax advantages. The interest and maturity amount is completely tax-free as Public Provident Fund Account (PPF) falls under the EEE (Exempt- Exempt) category.
7. National Savings Certificates (NSC)
National Savings Certificates (NSC) is a small savings scheme. This scheme promotes savings among low-income and mid-income groups. The current interest for this scheme is 6.8%. This scheme has a lock-in duration of five years.
Investors can invest in NSC with an amount as low as RS. 100. Only eligible individuals can invest in NSC. Resident Indians are the only category who are eligible to invest in NSC. HUFs, NRIs, and trusts cannot invest in NSC. Individuals can claim up to Rs. 1.5 lakhs as tax benefits while filing their income tax returns.
8. Kisan Vikas Patra (KVP)
Kisan Vikas Patra (KVP) is a small savings scheme raised for the farmers. The scheme is unfolded to all the citizens of India. The scheme pays a fixed interest of 6.9% per annum. The scheme has a lock-in period of 30 months. And the interest income is taxable for this scheme.
Individuals can invest with an amount as low as Rs. 1,000 in this scheme. And there is no limit on the maximum amount that one can invest. Indian citizens above 18 years can invest in Kisan Vikas Patra (KVP) scheme at any local post office.
9. Sukanya Samriddhi Accounts (SSA)
Sukanya Samriddhi Accounts (SSA) scheme backs the ‘Beti Bachao, Beti Padhao’ campaign. This post office saving scheme was launched by the Government of India in 2015. This scheme encourages girl child education and marriage.
The interest rate of the Sukanya Samriddhi Accounts (SSA) scheme for the current quarter is 7.6%. Parents or guardians can invest on behalf of the girl. The scheme evolves when the girl turns 21. The scheme allows investments only until the age of 15.
The minimum investment is Rs. 250, and the maximum investment is Rs. 1,50,000 per annum. No premature withdrawals are allowed until the scheme matures. Investment in SSY qualifies for tax exemption under Section 80C of the Income Tax Act, 1961.
Post Office Saving Schemes Details
|Scheme||Interest Rate||Minimum Investment||Maximum Investment||Eligibility||Tax Implications|
|Post Office Savings Account||4% per annum (p.a.)||Rs 20|
|No limit||Resident Indian, minor and major||Tax-free interest up to Rs 50,000 from the financial year 2018-19|
|Post Office Time Deposit Account (TD)||First-year – 5.5% p.a.|
Second-year – 5.5% p.a.
Third Year – 5.5% p.a.
Fourth Year – 6.7% p.a.
|Rs 200||No limit||Individual||Tax benefits up to 5 years under Section 80C on deposits|
|Post Office Monthly Income Scheme Account (MIS)||6.6% per annum payable monthly||Rs 1,500||For one account holder – Rs 4.5 lakh|
Joint account holders – Rs 9 lakh
|Individual||Interest earned is taxable and no deduction under Sec 80C for deposits made.|
|Senior Citizen Savings Scheme (SCSS)||7.4% p.a. (Compounded annually)||Rs 1,000||Maximum deposit over the lifetime allowed at Rs 15 lakh||Individuals of age> 60 years or age >55 years who have opted for VRS or superannuation||Tax benefit under Section 80C for deposits|
TDS to be deducted on interest earned for more than Rs 50,000 p.a.
|15-year Public Provident Fund Account (PPF)||7.1% p.a. (Compounded annually)||Rs 500 per financial year||Rs 1.5 lakh per financial year||Individual||Tax rebate under Section 80C for deposits (maximum Rs 1.5 lakh p.a.)|
|National Savings Certificates (NSC)||6.8% p.a. (Compounded annually)||Rs 100||No limit||Individual||Tax rebate under section 80C for deposits (maximum Rs 1.5 lakh p.a.)|
|Kisan Vikas Patra (KVP)||6.9% p.a. (Compounded annually)||Rs 1,000||No limit||Individual (Adult)||Interest is taxable but no tax on the amount received on maturity|
|Sukanya Samriddhi Accounts||7.6% p.a. (Compounded annually)||Rs 1,000 per financial year||Rs 1.5 lakh per financial year||Girl Child -up to 10 years from birth and one additional year of grace||Investment (up to Rs 1.5 lakh exempt under Section 80C), interest, and the amount received on maturity is tax-free|
Benefits of Post Office Saving Scheme:
–Government of India backs up all the Post Office Saving Schemes.
–The application procedure and the documentation required for this Post Office scheme is easy.
–There are many investment options available in the Post Office Saving scheme, so the investor can choose the schemes as per their requirements.
-The interest rate of the post office scheme is high about 4% to 7.60%.
-Post office saving scheme also offers long-term investment options. This option is useful for retirement, pension planning.
-The interest of these schemes like SCSS, SSY, and PPF is tax-free.
Here, we cover a small piece of information about the Post Office Saving Scheme. For the application process and to know more about other schemes you can visit the indiapost.gov website. Stay tuned to get notified about the other Government schemes.