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Post office savings schemes can be availed of by oneself from the 1.54 lakh post offices around the country. To open an account [Savings Bank(SB), Recurring Deposit (RD), Time Deposit(TD), Monthly Income Scheme (MIS)] SB3, SB103 (pay-in-slip) and specimen signature slip for SB and TD are required. In order to transfer accounts, the depositor should apply either in the prescribed form [SB10(b)] or a manual application.
When there is no transaction in an SB account continuously for three financial years, the account will be treated as silent account.
For revival, one application from the customer is required. The monthly deposits should be credited on any day of the month. If the monthly installment is not credited for any particular month, then it becomes a default.
| SB(cheque account) | INR. 500/- |
| SB(non cheque account) | INR. 50/- |
| MIS | INR. 1500/- |
| TD | INR. 200/- |
| PPF | INR. 500/- |
| Senior Citizen | INR. 1000/- |
Post Office Monthly Income Scheme (MIS)
Important points:
Interest rate of 8.4% per annum payable monthly w.e.f. 01-04-2013
Maturity period is 5 years.
No Bonus on Maturity w.e.f. 01.12.2011.
No tax deduction at source (TDS).
No tax rebate is applicable.
Minimum investment amount is Rs.1500/- or in multiple thereafter.
Maximum amount is Rs. 4.50 lakhs in a single account and Rs.9 lakhs in a joint account.
Auto credit facility of monthly interest to saving account if accounts are at the same post office.
Account can be opened by an individual, two/three adults jointly, and a minor through a guardian.
Non-Resident Indian / HUF cannot open an Account.
Minors have a separate limit of investment of Rs. 3 lakhs and the same is not clubbed with the limit of guardian.
Facility of premature closure of account after 1 year but on or before 3 years @ 2.00% discount.
Deduction of 1% if account is closed prematurely at any time after three years.
Suitable scheme for retired employees/ senior citizens and for those who need regular monthly income.
National Savings Certificate (NSC)
Important points:
NSC VIII Issue (5 years) – Interest rate of 8.5% per annum w.e.f. 01-04-2013
NSC IX Issue (10 years) - Interest rate of 8.8% per annum w.e.f. 01-04-2013
Minimum investment Rs. 100/-. No maximum limit for investment.
No tax deduction at source.
Investment up to Rs 1,50,000/- per annum qualifies for Income Tax Rebate under NSC - section 80C of IT Act.
Certificates can be kept as collateral security to get loan from banks.
Trust and HUF cannot invest.
A single holder type certificate can be purchased by an adult for himself or on behalf of a minor or to a minor.
The interest accruing annually but deemed to be reinvested will also qualify for deduction under NSC - section 80C of IT Act.
Public Provident Fund (PPF)
Important points:
Interest rate of 8.7% per annum w.e.f. 01-04-2013.
Minimum deposit is 500/- per annum. Maximum deposit is Rs. 1,50,000/- per annum
The scheme is for 15 years.
Investment up to Rs 1,50,000/- per annum qualifies for Income Tax Rebate under section 80C of IT Act.
Interest is completely tax-free.
Deposits can be made in lumpsum or in 12 installments.
One deposit with a minimum amount of Rs 500/- is mandatory in each financial year.
Withdrawal is permissible from 6th financial year.
Loan facility available from 3rd financial year upto 5th financial year. The rate of interest charged on loan taken by the subscriber of a PPF account on or after 01.12.2011 shall be 2% p.a. However, the rate of interest of 1% p.a. shall continue to be charged on the loans already taken or taken up to 30.11.2011.
Free from court attachment.
Non-Resident Indians (NRIs) not eligible.
An individual cannot invest on behalf of HUF (Hindu Undivided Family) or Association of persons.
Ideal investment option for both salaried as well as self employed classes.
Post Office Time Deposit Scheme
Important points:
1 year, 2 year, 3 year and 5 year time deposits can be opened.
Interest payable annually but compounded quarterly:
| PERIOD | RATE OF INTEREST |
| One Year | 8.20% |
| Two Years | 8.30% |
| Three Years | 8.40% |
| Five Years | 8.50% |
Minimum amount of deposit is Rs 200/- and in multiples of Rs 200/- thereafter. No maximum limit.
Investment up to Rs 1,50,000/- per annum qualifies for Income Tax Rebate under section 80C of IT Act.
Interest income is taxable.
Facility of redeposit on maturity of an account.
In case of premature closure of 1 year, 2 Year, 3 Year or 5 Year account on or after 01.12.2011 between 6 months to one year from the date of deposit, simple interest at the rate applicable to from time to time to post office savings account shall be payable.
2 year, 3 year or 5 year accounts on or after 01.12.2011 if closed after one year, interest on such deposits shall be calculated at a discount of 1% on the rate specified for respective period as mentioned in the concerned table given under Rule 7 of Post office Time Deposit Rules.
Account can be pledged as security against a loan to banks/ Government institutions.
Any individual (a single adult or two adults jointly) can open an account.
Group Accounts, Institutional Accounts and Misc. account not permissible.
Trust, Regimental Fund or Welfare Fund not permissible to invest.
Senior Citizen's Savings Scheme
Important points:
Interest @ 9.2% per annum from the date of deposit on quarterly basis w.e.f. 01-04-2013
Minimum deposit is Rs 1000 and multiples thereof. Maximum limit of 15 lakhs.
Maturity period is 5 years and can be extended for a further period of 3 years.
Age should be 60 years or more, and 55 years or more but less than 60 years who has retired under a Voluntary Retirement Scheme or a Special Voluntary Retirement Scheme on the date of opening of the account within three months from the date of retirement.
No age limit for the retired personnel of Defence services provided they fulfill other specified conditions.
The account may be opened in individual capacity or jointly with spouse.
TDS is deducted at source on interest if the interest amount is more than Rs 10,000/- per annum.
Investment up to Rs 1,50,000/- per annum qualifies for Income Tax Rebate under section 80C of IT Act.
Interest can be automatically credited to savings account provided both the accounts stand in the same post office.
Premature closure is allowed after one year on deduction of 1.5% of the deposit and after 2 years on deduction of 1%.
No withdrawal permitted before the expiry of a period of 5 years from the date of opening of the account.
Non-resident Indians (NRIs) and Hindu Undivided Family (HUF) are not eligible to open an account.
Post Office Savings Account
Important points:
Rate of interest 4.0% per annum
Minimum amount Rs 50/- in case of non-cheque account, Rs.500/- in case of cheque account.
Maximum balance permissible is Rs 1,00,000/- in a single account and Rs 2,00,000/- in a joint account.
Interest Tax Free.
Any individual can open an account.
Cheque facility available.
Group Account, Institutional Account, other Accounts like Security Deposit account & Official Capacity account are not permissible.
Sukanya Samriddhi Accounts
Important points:
• Rate of interest 9.2% Per Annum (w.e.f 1-4-2015),calculated on yearly basis ,Yearly compounded.
• Minimum INR. 1000/-and Maximum INR. 1,50,000/- in a financial year. Subsequent deposit in multiple of INR 100/- Deposits can be made in lump-sum No limit on number of deposits either in a month or in a Financial year
• A legal Guardian/Natural Guardian can open account in the name of Girl Child.
• A guardian can open only one account in the name of one girl child and maximum two accounts in the name of two different Girl children.
• Account can be opened up to age of 10 years only from the date of birth. For initial operations of Scheme, one year grace has been given. With the grace, Girl child who is born between 2.12.2003 &1.12.2004 can open account up to1.12.2015.
• If minimum Rs 1000/- is not deposited in a financial year, account will become discontinued and can be revived with a penalty of Rs 50/- per year with minimum amount required for deposit for that year.
• Partial withdrawal, maximum up to 50% of balance standing at the end of the preceding financial year can be taken after Account holder’s attaining age of 18 years.
• Account can be closed after completion of 21 years.
• If account is not closed after maturity, balance will continue to earn interest as specified for the scheme from time to time.
• Normal Premature closer will be allowed after completion of 18 years /provided that girl is married.
Kisan Vikas Patra (KVP)
Important points:
• Amount Invested doubles in 100 months (8 years & 4 months)
• Available in denominations of Rs 1,000, 5000, 10,000 and Rs 50,000. Minimum deposit Rs 1000/- and no maximum limit.
• Certificate can be purchased by an adult for himself or on behalf of a minor or by two adults.
• KVP can be purchased from any Departmental Post office.
• Facility of nomination is available.
• Certificate can be transferred from one person to another and from one post office to another.
• Certificate can be encashed after 2 & 1/2 years from the date of issue.
