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Post Office Saving Schemes - Overview, Plans And Benefits

IndianMoney.com Research Team | Posted On Wednesday, April 03,2019, 03:10 PM

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Post Office Saving Schemes - Overview, Plans And Benefits

 

 

Post office savings scheme includes a wide array of financial investment products that offer safety of investments and give guaranteed returns. Post office savings schemes are best suited for investors who want to park their surplus money in a safe investment option and earn good interest on them. The post office investment schemes are best suited for individuals living in rural and semi-urban areas who have access to limited banking facilities.

The Indian postal service has a large network across the country and has its reach across the most remote areas in India. So the savings schemes are designed in a manner that they benefit all sections of the population i.e. organised and unorganised sectors, low to moderate income group, senior citizens and farmers.

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Post Office Saving Schemes – Overview, Plans & Benefits

What are the Options Available Under Post Office Investment Schemes?

The options available under this scheme are as follows:

Post Office Savings Account:  The post office savings account provides the customer with the facility to deposit as well as withdraw money as and when required. The savings account can be transferred across post offices. Currently, the interest rate is 4% a year, which is fully taxable.

Post office Savings account is an ideal option, where a depositor can keep money as savings. The savings account not only offers interest on the deposited amount, but also offers liquidity and tax benefits under section 80TTA of the Income Tax Act, 1961.

Post Office Recurring Deposit Account (PORD): A post office recurring deposit is a deposit scheme that allows depositing a fixed amount each month. The money deposited earns interest over a fixed period of time. The scheme currently offers an interest rate of 7.3% a year on recurring deposits, which is compounded quarterly. A recurring deposit is an ideal investment option for regular depositors as it offers a host of features and benefits like premature withdrawal, no TDS on interest, multiple account facility and joint account facility.

Post Office Time Deposit Account (POTD): this scheme is an alternative to bank fixed deposits and comes with different investment tenures and so the rate of interest varies with the time period of the investment. The minimum investment amount is Rs 200 and there is no upper limit. There are a host of benefits offered by the POTD account along with tax benefits for 5 year deposits.

Post Office Monthly Income Scheme Account (POMIS): Post office offers POMIS, which is a popular scheme among the rural and urban people in India. It is a low-risk scheme and generates a steady income. You can invest up to Rs 4.5 lakhs individually or Rs 9 lakhs jointly, for an investment period of 5 years. The current Post Office Monthly Income Scheme interest rate is 7.7% a year and the interest is paid on a monthly basis.

Senior Citizen Savings Scheme (SCSS): The senior citizens savings scheme (SCSS), is a popular small saving scheme, which offers retirees with a risk-free and tax saving investment option. The SCSS scheme is availed for a minimum of 5 years and can further be extended for 3 years. The money invested must be in multiples of Rs 1,000. Currently, the rate of interest offered for senior citizen saving scheme is 8.7% a year, which makes it an ideal investment option for retirees.

Public Provident Fund Account (PPF): public provident fund is a long term investment scheme, that also helps in tax saving. Currently, it offers an interest rate of 8% a year, compounded annually. The funds invested towards the scheme are eligible for tax benefits and can be availed with a minimum investment of Rs 500. It is a good scheme for investors who want to get the Section 80C tax deduction, along with safety of the principal and tax-free returns

National Savings Certificates (NSC): National Saving Certificate or NSC, is a fixed income investment scheme. The scheme has a maturity period of 5 years. There is no specified maximum limit on investment in NSC, but investments of up to Rs 1.5 Lakh enjoy a tax deduction under Section 80C of the Income Tax Act. These certificates earn a fixed interest at the rate of 7.6% a year, compounded annually. The interest is accumulated over the time period and is paid along with the principal amount at maturity.

  • Kisan Vikas Patra (KVP): This is one of the most preferred investment schemes among the low income group which offers an interest rate of 7.3% a year. There’s premature withdrawal at 2½ years and transfers/endorsements to a third person easily.
  • Sukanya Samriddhi Account (SSA): A Sukanya Samriddhi Yojana account can be opened at any time after the birth of a girl child, till she turns 10, with a minimum deposit amount of Rs 250. The objective of the Sukanya Samriddhi Yojana is to encourage people deposit money in the saving scheme that enables the parents save for the girl’s future.

A maximum of Rs 1.5 Lakh can be deposited in this scheme. Currently, the scheme is offering an attractive interest rate of 8.5% a year, as well as provides tax exemption under Section 80C of the income tax act, 1961. The returns are tax free in this scheme.

SEE ALSO:  Post Office Saving Schemes

What are the Unique Benefits by Post Office Investment Saving Schemes?

The post office savings schemes are the most popular schemes among both the rural and the urban population, because of risk free returns and better interest rates.

  • Easy to Invest: The post office investment schemes are an ideal option for investors to park their money for the long-term and earn decent returns on them. The safety and convenience of these investment options make them a much preferred scheme among the masses.
  • Simple Process: The schemes are easy to avail and require minimum paperwork. The post office schemes are hassle free and simple. The schemes are investment options offered by the India Post and they are backed by the Union Government.
  • Long Term Investment: The post office investment schemes are the best investment options for people who are looking to fulfill some long-term investment goals. Most of the schemes have investment period which ranges from 5 years to 15 years. These investment schemes help in planning for retirement, pension or long term goals.
  • Risk Free and Good Interest Rate: Interest rates range from 4- 9% and are totally risk free. There is a minimal amount of risk involved as this scheme enjoys Sovereign Guarantee.
  • Different Products for Different Requirements: India Post offers different investment schemes to suit the requirements of different groups of people. Like SCSS, PPF and POMIS are best suited for senior citizens, who want to generate monthly income. Likewise, there are schemes like NSC and recurring deposits to fulfill long term investment goals. There are special investment schemes for farmers (Kisan Vikas Patra) and parents of girl child (Sukanya Samriddhi Yojana) that cater to the specific requirements and goals of these groups of people.

How to Open a Post Office Saving Schemes Account?

For opening a post office account, you must be a resident of India and above 18 years of age. To open the post office savings account follow the steps given below:

  • Visit your nearest post office or the official website of India Post and get the application form.
  • Fill the form with the required information and attach relevant documents and passport sized photographs along with the form.
  • You will have to pay the deposit money which is generally above Rs 20.
  • Senior citizens must apply through a separate application form provided only to senior citizens.
  • Once the verification and payment is completed, your savings account is opened at the post office.

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