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Savings Schemes In Post Office
Retirement Planning is very important and you need to make wise investment decisions. Post Office schemes help you earn compound interest and also offer tax benefits.
1. National savings certificate (NSC):
The interest rate offered on NSC is 7.6% compounded annually and is payable at maturity.
Minimum investment amount in the NSC is Rs 100 and in multiples of Rs 100 with no upper limit.
The amount deposited in the NSC qualifies for deductions under Section 80C of the Income Tax Act. Interest accrued each year is deemed to be reinvested and also enjoys the Section 80C benefit.
2. Public Provident Fund (PPF):
The interest rate on the PPF is 7.6% for the quarter April – June 2018. PPF has a lock-in of 15 years. After the expiry of 15 years, you can apply for an extension of a further 5 years.
You can invest a maximum of Rs 1,50,000 in a Financial Year which can be invested either as a lump sum or in monthly contributions, which cannot exceed 12 in a financial year.
You can avail a loan against PPF where the interest rate charged is 2% more than the interest rate offered by the PPF Scheme. The Principal amount repaid is credited back to your PPF account and the Interest paid on the loan goes to the Government.
Your investment in PPF enjoys the EEE benefit. You get a tax deduction up to Rs 1.5 Lakhs a year under Section 80C of the income tax act. The Interest and the amount withdrawn at maturity are tax-free.
To close your PPF account prematurely, you should have completed at least 5 Financial Years.
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