Post Office Schemes And Its Types

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Post office schemes are offered by the Government of India and are highly secure. There are different schemes catering different needs, some of the schemes are exempted from Income tax.

While, most of the schemes can be transferred from post office to banks and vice a versa.

Here are different types of schemes offered by post office.

Post Office Monthly Income Scheme

It's a safe and sure way to get monthly income. It's specially tailor made for retired employees/senior citizens, who look at monthly income that is secure.

Interest rates are currently pegged at 7.80per cent and the maturity period is for five years. There is also an auto credit facility available to the direct credit of the investors SB account.

Minimum and maximum investment: If it's a single account, the minimum investment amount is Rs 1500/- and the maximum permissible is Rs 4.5 lakhs.

If it's a joint account the minimum amount permissible is Rs 1500/ and maximum is restricted to Rs 9 lakhs. 
The above scheme ensures automatic credit to your post office savings bank account.

Post Office Time Deposit (TD) Scheme

Here any individual can open an account. The duration for the deposits are one year, two years, three years and five years.

The prevailing rate of interests  are 7.1%, 7.2%, 7.4%, 7.9%, compounded quarterly for 1, 2, 3 & 5 year accounts respectively.

The investment in the case of  five years TD qualifies for benefit under section 80C of the Income Tax Act, 1961.

Duration of accounts : 1, 2, 3 & 5 year TDs, with a minimum deposit of Rs 200/- and in multiples of Rs 200/- thereafter. There is no restriction on the maximum permissible amount.


Post Office Savings Account

Any individual can open an account except for group accounts, institutional accounts, other accounts like security deposit accounts & official capacity accounts are not permissible. Interest rates as of now is 4% per annum. 

Debit Cards can be issued to savings account holders having prescribed minimum balance on the day of issue of card.

Individuals should at least do one transaction of deposit or withdrawal in three financial years in order to keep the account active.

Account can also be opened in the name of minor and a minor of 10 years and above age can open and operate the account.


National Savings Certificate

This scheme is specially designed for government employees, businessmen and other salaried classes who are Income Tax assesses.

There is no restriction on the maximum investment amount and no tax is deducted at source. Certificates can be kept as collateral security to avail loans from banks. Investment up to Rs 1,50,000/- per annum qualifies for rebate under section 80C of the Income Tax Act.

Note that in case of NSC VIII , transfer of certificates from one person to another can be done only once from date of issue to date of maturity.

The interest rate is applicable at 8.1% compounded six monthly but payable at maturity. If calculated, Rs 100/- grows to Rs 147.61 after 5 years.

Senior Citizen Savings Scheme (SCSS) Account

These accounts may be opened by an individual, who has attained 60 years of age or above on the date of opening of the account.

Who has attained the age 55 years or more but less than 60 years and 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.

The investment under this scheme qualify for the benefit of Section 80C of the Income Tax Act, 1961.

Premature closure is allowed after one year on deduction of an amount equal to1.5% of the deposit & after 2 years 1% of the deposit.

In case of SCSS accounts, quarterly interest will be payable on 1st working day of April, July, October and January. It will be applicable at all CBS Post Offices.

Monthly Income Scheme (MIS) and Senior Citizen Saving Scheme (SCSS) are the best for Senior Citizens who desire monthly/quarterly interest. Invest in MIS / SCSS and transfer interest into RD account through SB account through written request and earn a combined higher interest.

Public Provident Fund Account

PPF as its popularly called is an ideal investment option for both salaried as well as self employed classes and best for long term investment.

One can invest up to Rs 1,50,000 per annum and such an investment qualifies for tax rebate under section 80 C of the IT Act.

Interest rates as of now are 8.10% (latest). This scheme is for 15 years and loan facility is available from third year.

Withdrawal is allowed every year from 7th financial year from the year of opening account.

Read more about: post office schemes, ppf
Story first published: Monday, March 26, 2012, 13:04 [IST]
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