Saving Schemes in Post Office: Types, Benefits & more

. 7 min read
Saving Schemes in Post Office: Types, Benefits & more

Saving is important for all of us! India Post, which controls the nation's postal chain, gives investors a few deposit avenues, normally known as Post Office Saving Schemes. These schemes were acquainted with giving investment avenues and teach saving discipline among Indians from across financial classes. Each Post Office offers these saving schemes to empower India’s people to apply and enrol without any problem.

Let us go through the different Post Office saving plans to help you pick the one according to your necessity.

1. Monthly Income Scheme Account (MIS)

This Post Office monthly saving scheme is a reliable saving instrument that permits you to contribute a limit of Rs. 4.5 Lakh separately and Rs. 9 Lakh mutually. As an MIS plan, it enables investors to generate a consistent monthly income.

  • The interest rate of 7.7% is paid consistently monthly.
  • The amount should be saved/deposited in multiples of Rs 1500.
  • Any individual can open the account. Two or more adults can open a joint account, and all joint holders will have an equivalent offer in every joint account. Any individual can contribute up to 4.5 lakh.
  • Any number of accounts can be made in any Post Office; the complete balance in all the accounts doesn't surpass the maximum investment limit.
  • Premature encashment is permitted between 1-3 years from the account opening subject to the derivation of 2% from the deposit account and 1% in the event of encashment after three years.

2. Senior citizen saving scheme account

Investors, who are 60 years of age, or 55 years of age in the event of intentional retirement, can deposit up to Rs. 15 lakh over their lifetime in a Senior Citizen Savings Scheme to procure normal interest pay. The scheme likewise accompanies a lock-in period of 5 years.

  • Interest at the rate of 8.5% p.a is payable on a quarterly premise.
  • Only one deposit in the account in multiples of Rs 1000 is admissible.
  • Any individual having the age of 60 years can open the account. The account can likewise be opened by an individual who is 55 or above it however under 60 years old and has resigned on superannuation or under VRS provided; the account is opened within a month of the receipt of retirement benefits.
  • Any number of accounts can be opened in any Post Office; all the accounts' total balance cannot surpass the maximum investment limit.
  • Interest up to Rs 10000 for every annum is absolved from Tax under segment 80 TTA.
  • It is Qualified for tax deduction under section 80C.

3. Saving account

Post Office savings accounts offer an interest rate of 4% p.a. The account can be opened through money just with a minimum amount of Rs 20. For the non-cheque facility account, the least amount to be kept up is Rs 50. On the off chance that an account is opened with Rs 500, a cheque facility is available for the account, and the least balance is to be kept in such the account is Rs 500. Tax benefit-Interest up to Rs 10,000 for every annum is excluded from Tax under section 80TTA.

4. 5-Year Post Office recurring deposit Account

With little monthly investment, you can decide on the same number of RD accounts as you need with a Post Office. These investment options permit you to set aside periodic instalments while enabling considerable corpus creation over investment tenure.

  • The deposit account offers an interest of 7.3% p.a.
  • The minimum amount to open the recurring account is Rs 10.
  • Any individual can open a recurring account. Two adult individuals can likewise open a joint account.
  • Any number of accounts can be opened in any Post Office, and the accounts are transferable from one Post Office to the next.
  • Accounts can be opened through money or cheque mode both. For the cheque, the date of the deposit should be the date of the cheque presentation.

5. Kishan Vikas Patra (KVP)

Kisan Vikas Patra scheme offers an interest rate of 7.45% p.a. In this India Post Office saving plan, you need to buy a KVP certificate. The amount you invested in the KVP certificates doubles after a recommended period. You can buy a KVP certificate from any of the Post Offices across India. It matures in 124 days.

6. National Savings Certificates

The public savings certificate offers an interest rate of 8% and is accumulated on a half-yearly premise; however, it is payable at maturity. Likewise, it is the best investment choice for a salaried individual because the invested amount by buying NSC certificates gives a discount in the income tax under 80 C. You need to buy an NSC certificate from any Post Office. The invested sum doubles after a recommended period.

7. Sukanya Samriddhi Account Scheme

It is additionally the most well-known plan under the India Post Office saving plan. Guardians who have a young girl child can open an SSA account in any Post Office. The age of young girl kids should be under ten years. You can likewise take a refund at the personal expense for the deposit amount in the Sukanya account.

The rate of interest offered under this plan is 8.5% p.a. calculated every year. You can deposit up to Rs.1, 50,000 in a solitary SSA account in a financial year. The deposit sum can be made in a single amount or monthly instalments. An online deposit facility is additionally accessible like a PPF conspire. You can deposit cash into the Sukanya account through IPPB mobile application. Normal premature closure of the SSA account will be permitted for the marriage of a young girl only after the completion of 18 years.

8. Public Provident Fund Scheme

  • PPF is one of the ideal plans and is accessible with a lock-in period of 15 years. Regardless, investors can benefit from partial withdrawal following five years. A base deposit of Rs. 500 every year is needed to keep the record dynamic.
  • Interest paid to the public provident fund scheme is 8% yearly.
  • Account opening by a deposit of Rs 100 only. The deposit can be made through a one-time instalment or in a 12-months instalment.
  • An account can be opened through money and by cheque. In the event of a cheque, the date on which the cheque is delivered in the public authority account will be the account opening date.
  • A joint account can't be opened under the Public Provident Fund scheme.
  • Public Provident accounts get matured in 15 years and can be stretched out to an additional five years subject to the application allowed inside one year of maturity.
  • No premature closure allowable. Also, interest earned under the Public Provident Fund scheme is tax-exempt and qualified for deduction under section 80C

9. Post Office Time Deposit Account Scheme

It is a comparative plan of the Fixed Deposit scheme. You can deposit for one year to five years in the Time Deposit plan of the Post Office. Interest will be payable yearly, and it very well might be credited to the saving account of the account holder at his choice.

  • Any person above ten years of age can open-Time a Deposit account.
  • More than one account can be opened in the Post Office.
  • Two adults can open a joint account as well.
  • Interest payable every year but calculated quarterly.
  • Premature closure or withdrawal allowed after the completion of 6 months.

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Q. Is it safe to put money into a savings scheme with the Post Office?

Ans: Indeed, saving schemes offered by the Post Office are secured about by the public authority, and the rates of interest on these plans are likewise amended by the Finance ministry each quarter. Consequently, it is safe to put money into a savings scheme with the Post Office to get guaranteed investment returns.

Q. Is Post Office investment tax-exempt?

Ans: Indeed, the vast majority of the saving scheme offered by the Post Officer gives tax deduction up to Rs 1.5 Lakhs on investment under Sec 80 C of the Income Tax Act. Be that as it may, a few plans, for example, Post Office Monthly Income Scheme and Post Office Recurring Deposit, don't offer any duty refund.

Q. Is there any Post Office Scheme for students?

Ans: Yes, students over the age of 18 can put money into saving schemes offered by the Post Offices. SSY or Sukanya Samriddhi Yojana is one investment scheme by the Post Office in which parents or lawful guardians can contribute to their young girl children aged ten years or less.

Q. How do I put money in the Post Office monthly income scheme?

Ans: To save money into the Post Office monthly income saving scheme, you should first have a savings account with the Post Office. You would then invest money into the scheme by making a single amount instalment through a dated cheque.

Q. Is there any fee charged by the Post Office if there is an account transferable?

Ans: Yes, the Post Office charges Rs 100 to transfer an account from one city to another.

Q. If a cheque dishonour, will the Post Office charge any fee for that?

Ans: Yes, in case of dishonour of cheque, Post Office charge fee of Rs, 100. Also, taxes apply to the service charge, which shall be payable.