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POST OFFICE SAVING SCHEME

There are so many Post Office Saving Schemes products that are available in the market which promote people to do more savings. As these products not only provide the security of the principal but also provide returns on the principal saved.

The government has also taken steps to promote the savings by providing us with multiple Products.

Products available are:

  • Post Office Savings Account
  • 5-Year Post Office Recurring Deposit Account (RD)
  • Post Office Time Deposit Account (TD)
  • Post Office Monthly Income Scheme Account (MIS)-
  • Senior Citizen Savings Scheme (SCSS)-
  • 15 year Public Provident Fund Account (PPF)
  • National Savings Certificates (NSC)
  • KisanVikasPatra (KVP)
  • SukanyaSamriddhi Accounts

Post Office Savings Account

    • Account opening is done by cash only
    • The minimum balance limit for an account in which cheque facility is not provided is INR 50
    • However, if cheque facility is provided that the investor needs to maintain INR 500
    • Interest earned from this account is tax free as long as the interest for one financial year does not exceed INR 10,000
    • These accounts provides the facility to nominate someone at the time of opening of account or even after the opening of account
    • When a minor attains the majority has to apply to get the account converted to his/her name
    • These accounts are transferrable from one post office to other
    • Account opening can be done on behalf of minor and even if the minor is 10 years and above then the minor can operate the account on its own
    • These accounts limits the person to open only one account in one post office
    • Account opening can be done by two or three adults together as joint account holders
    • In order to keep the account active it is necessary to make atleast one deposit transaction and one withdrawal transaction in 3 financial years
    • Accounts can be converted from single to joint and Vice Versa
    • Electronic mode Deposits and withdrawals facility is available in CBS Post offices.
    • ATM/Debit Cards facility is also provided to Savings Account holders of CBS Post offices




5-Year Post Office Recurring Deposit Account (RD)

Features of 5-Year Post Office Recurring Deposit Account (RD) are as follows:

  • Rate of interest earned on RD is 7.4% per annum (quarterly compounded)
  • Account opening is done by cash or cheque. But the date on cheque mentioned should be the same date when cheque is deposited
  • For account opening in Recurring Deposit minimum Rs 10/month. However there is no limit on maximum amount
  • This type of account also gives the facility of nominating someone when opening an account or even after the opening of account
  • These accounts are transferrable to any other post office
  • There is no limit on the number of accounts that can be opened by any individual
  • Account opening can be done on behalf of minor and even if the minor is of 10 years and above then the minor can operate the account on its own
  • When a minor attains the majority has to apply to get the account converted on his/her name
  • Account opening can be done by two adults together as joint account holders
  • If account is opened before 15th then the subsequent deposits can be made up to 15th day of next month. However if the account is opened after 15th then this date is till last working day of the month
  • If the subsequent deposit is not paid by the last date then a penalty fee is charged
  • The account holders enjoys the benefit of rebate if 6 instalments are paid in advance
  • The recurring deposit accounts can be converted from single to joint accounts and vice versa
  • The account holder has an option to withdraw upto 50% of the amount after 1 year

Post Office Time Deposit Account (TD)

  • Interest will be received yearly but compounding will be done quarterly

From 1.4.2016, interest rates are as follows:-

Period Rate
1yr.A/c 7.1%
2yr.A/c 7.2%
3yr.A/c 7.4%
5yr.A/c 7.9%
  • Post Office Time Deposit Account (TD) account can be opened by an individual
  • Account opening is done by cash or cheque. But the realization date of cheque is treated as date of account opening
  • For account opening minimum Rs200 and thereafter its multiple. However there is no limit on maximum amount
  • This type of account also gives the facility of nominating someone when opening an account or even after the opening of account
  • These accounts are transferrable to any other post office
  • There is no limit on the number of accounts that can be opened by any individual
  • Account opening can be done on behalf of minor and even if the minor is of 10 years and above then the minor can operate the account on its own
  • When a minor attains the majority has to apply to get the account converted on his/her name
  • Account opening can be done by two adults together as joint account holders

Post Office Monthly Income Scheme Account (MIS)

  • Post Office Monthly Income Scheme Account (MIS) account can be opened by an individual
  • Interest rate is 7.80% per annum payable monthly
  • Account opening is done by cash or cheque. But the realization date of cheque is treated as date of account opening
  • Account opening is done in multiple of INR 1500
  • Maximum investment allowed is INR 4.5 Lac per individual
  • Even if you have sharing on other accounts as joint holder still the limit will not exceed more than INR 4.5 Lac, including the sum of all accounts
  • This type of account also gives the facility of nominating someone when opening an account or even after the opening of account
  • These accounts are transferrable to any other post office
  • There is no limit on the number of accounts that can be opened by any individual subject to the maximum amount that can be invested overall
  • Account opening can be done on behalf of minor and even if the minor is
  • When a minor attains the majority has to apply to get the account converted on his/her name
  • Account opening can be done by two or three adults together as joint account holders. And all account holders have equal share
  • Maturity period of these account is 5 years
  • You can receive the interest through ECS or standing instruction under your CBS account
  • If you withdraw before 3 years, 2% of the deposit will be deducted and this deduction will be 1% after 3 years
  • Account opened on or after8.12.07 and up to 30.11.2011 will get 5% Bonus

Senior Citizen Savings Scheme (SCSS)

  • Rate of interest earned is 8.6% per annum
  • Amount is to be deposited in multiple of Rs 1000 but it should not exceed 15 Lacs
  • As the name suggest people above 60 years of age can open this account
  • If the individual is retired or has taken Voluntary Retirement then individual can open the account after 55 years but less than 60 years within month of receipt of retirement and this should not exceed the value of retirement benefits
  • Maturity period of this scheme is 5 years
  • Account opening is done by cash for amount less than 1 Lac and by cheque for transaction more than 1 Lac
  • Realization date of cheque is treated as date of account opening
  • Recurring Deposit account opening can be done minimum Rs 10/month. However there is no limit on maximum amount
  • This type of account also gives the facility of nominating someone when opening an account or even after the opening of account
  • These accounts are transferrable to any other post office
  • There is no limit on the number of accounts that can be opened by any individual
  • Account opening can be done individually or as joint account along with spouse
  • Investor enjoys the benefit of opening as many accounts provided the maximum amount that can be saved in total is not exceeded
  • Interest can be drawn through auto credit into savings account at same post office, or through PDCs or Money Order
  • Quarterly interest is payable on 1st working day of the month
  • Account can be closed before maturity provided the investor has to pay the following penalty:
  • Deduction of an amount equal to1.5% of the deposit before 2 years&after 2 years 1% of the deposit
  • After maturity, the account can be extended for further three years within one year of the maturity by giving application in prescribed format. In such cases, account can be closed at any time after expiry of one year of extension without any deduction
  • If interest earned is Rs 10000 p.a. or more then tax is deducted at Investor also enjoys tax benefit under Section 80C of the Income Tax Act, 1961 from 1.4.2007.

15 year Public Provident Fund Account (PPF)

  • This type of account can be opened with INR 100 but INR 500 is the minimum amount that account holder needs to deposit in a financial year and the maximum amount that can be invested is INR 1,50,000/-
  • Interest rate is 8.10% per annum (compounded yearly)
  • PPF does not have the facility of Joint account
  • Account opening is done by cash or cheque. But the realization date of cheque is treated as date of account opening
  • This type of account also gives the facility of nominating someone when opening an account or even after the opening of account
  • These accounts are transferrable to any other post office
  • Subscriber can open only one account
  • Account opening can be done on behalf of minor but the overall limit is still 1.5 lac
  • Maturity period of these account is 15 years and can be extended for 5 years within 1 year of maturity
  • Premature closure of PPF account is not allowed before 15 years.
  • Deposits are eligible for tax deduction under Sec. 80C of IT Act.
  • Interest earned on PPF is absolutely tax-free.
  • Account holder can withdraw every year after the account has completed 7 years duration
  • The account holder is also given loan facility from the 3rd financial year.
  • No attachment under court decree order.
  • The PPF account can be opened in a Post Office or Public sector Bank



National Savings Certificates (NSC)

  • This type of account can be opened with INR 100 or in a multiple of INR 100, 500, 1000, 5000, 10000
  • Interest rate is 8.1% compounded six monthly but the amount is payable at maturity
  • Tenure of the Scheme is 5 years
  • Account opening is done by cash or cheque. But the realization date of cheque is treated as date of account opening
  • NSC can be taken by an adult for himself or on behalf of minor
  • Tax rebate is provided under Sec 80C of Income tax act
  • This type of account also gives the facility of nominating someone when opening an account or even after the opening of account
  • These accounts are transferrable to any other post office
  • If the certificate is transferred from one person to another, then name of old holder is rounded and new holder’s name is written on the old certificate and on the purchase application (in case of non-CBS Post offices) under dated signatures of the authorized Postmaster along with his designation stamp and date stamp of Post office.

KisanVikasPatra (KVP)

  • People are willing to take KisanVikasPatra as the amount invested here doubles after certain tenure (approx. 10 years).
  • Minimum amount to be deposited is Rs 1000 and has no limit for maximum amount which can be invested
  • Amount invested should be in multiple of 1000, 5000, 10000 or 50000
  • Kisan Vikas Patra can be purchased by an adult or on the behalf of a minor, it can also be bought as joint investment by 2 individuals
  • It can be purchased from any Post Office
  • Investment in KVP gives you an option to choose a nominee
  • KVP ‘s are transferrable be it from one person to other or one post office to other

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