This section of InvestInn offers information about various savings and investments plans available to residents of India via. Indian Post offices. These schemes are popular among each and every section of society as they offers higher returns without any risk loss. i.e. Guaranteed returns.Current Small Savings Schemes With Main Features
- Post Office Time Deposits
- Post Office Recurring Deposits
- Post Office Monthly Income Scheme [Post Office MIS]
- National Savings Certificates [NSC]
- Kisan Vikas Patra - [KVP]
- Public Provident Funds [PPF]
- Deposit Scheme for Retiring Government Employees.
- Deposit Scheme for Retiring Employees of Public Sector Companies.
- Postal Life Insurance
1. Post Office Time Deposits
Post office Time deposit scheme is a type of fixed deposit account offered by Department of post, Government of India at all post office. This saving plan is best for those investors who want to deposit a lump sum for a fixed period. Investor gets a lump sum (principal + interest) at the maturity of the deposit, where rate of interest on investment depend on the term of deposit.
Who can open
- A single adult or two adults jointly,
- A pensioner to receive/credit his monthly pension,
- Group Accounts by Provident Fund,
- Superannuation Fund or Gratuity Fund, Authority controlling funds of the Sanchayika. Public Account by a local authority/body,
- Institutional Accounts by the Treasurer of Charitable Endowments for India, Trust Regimental Fund & Welfare Fund,
- A cooperative society / cooperative bank or scheduled bank on behalf of its members, clients or employees
- Gazetted Officer in his official capacity.
[ Non Resident Indian / HUF can not open the account. ]
Nomination facility
Nomination facility is available under Post office Time Deposit scheme.
Amount Required
Minimum amount required: Rs.200/-. Maximum Amount : No Limit
Time / term of investment
Time Deposits can be made for the periods of 1 year, 2 years, 3 years and 5 years.
Interest Rates
Period of deposit--- Rate of Interest per cent/ per annum
1 YEAR ----------------6.25
2 YEARS ---------------6.50
3 YEARS ---------------7.25
5 YEARS ---------------7.50
2. Post Office Recurring Deposit Accounts
- A single adult or two adults jointly,
- A guardian on behalf of a minor or a person of unsound mind; or
- A minor who has attained the age of ten year, in his own name.
Where can be opened :
At any post office.
Period of maturity of an account is five years.
Deposits
Sixty equal monthly deposits shall be made in an account in multiples of Rs. five subject to a minimum of ten rupees.
Defaults in deposits
- Accounts with not more than four defaults in deposits can be regularized within a period of two months on payment of a default fee.
- Account becomes discontinued after more than four defaults.
- On maturity of the accounts opened on or after 1st March, 2003, an amount (inclusive of interest) of Rs. 728.90 is payable to a subscriber of Rupees: Ten denomination account.
- Amount repayable, inclusive of interest, on an account of any other denomination shall be proportionate to the amount specified above.
Depositor is provided with a pass book with entries of the deposited amount and other particulars duly stamped by the post Office.
Premature closure of accounts is permissible after expiry of three years provided that interest at the rate applicable to post office savings account shall be payable on such premature closure of account.
Continuation after maturity
Permissible for a maximum period of five years.
A single adult or 2-3 adults jointly.
More than one account can be opened subject to maximum deposit limits.
At any post office.
Maturity
Period of maturity of an account is six years.
Only one deposit shall be made in an account.
Deposit limits
Minimum: rupees one thousand.
Maximum: rupees three lakhs in case of single and rupees six lakhs in case of joint account. Deposits in all accounts taken together shall not exceed Rs. three lakhs in single account and Rs. six lakhs in joint account. The depositor’s shares in the balances of joint accounts shall be taken as one half or one third of such balance according as the account is held by 2 or 3 adults.
Interest
- Interest @ 8 per cent/ per annum, payable monthly in respect of the accounts opened on or after the 1st March, 2003.
- In addition, bonus equal to ten per cent of the deposited amount is payable at the time of repayment on maturity.
Depositor is provided with a pass book with entries of the deposited amount and other particulars duly stamped by the post Office.
Premature closure facility is available after one year subject to condition.
Closure of account
Account shall be closed after expiry of 6 years, bonus equal to ten per cent of deposits shall be paid alongwith principle amount.
Income tax relief is available on the interest earned as per limits fixed vide section 80L of Income Tax, as amended from time to time.
Who can purchase
- An adult in his own name or on behalf of a minor,
- A minor,
- A trust,
- Two adults jointly,
- Hindu Undivided Family.
Available for purchase/issue at Post Offices.
Maturity
Period of maturity of a certificate is six Years.
- Nomination facility is available.
- Certificates can be transferred from one post office to any other post office.
- Transfer from one person to another person permissible in certain conditions.
- Certificates are available in denominations (face value) of Rs. 100, Rs. 500, Rs. 1000, Rs. 5000 & Rs. 10,000.
- There is no maximum limit for purchase of the certificates.
- With effect from 1st March, 2003, Maturity value a certificate of Rs. 100 denomination is Rs. 160.10.
- Maturity value of a certificate of any other denomination shall be at proportionate rate.
- Interest accrued on the certificates every year is liable to income tax but deemed to have been reinvested.
Premature encashment
Premature encashment of the certificate is not permissible except at a discount in the case of death of the holder(s), forfeiture by a pledgee and when ordered by a court of law.
Place of Encashment/discharge on maturity
Can be encashed/discharged at the post office where it is registered or any other post office.
Income Tax relief
- Income Tax rebate is available on the amount invested and interest accruing every year under Section 88 of Income tax Act, as amended from time to time.
- Income tax relief is also available on the interest earned as per limits fixed vide section 80L of Income Tax, as amended from time to time.
Kisan Vikas Patras (KVPs) are available at all Head Post Offices and authorized post offices throughout India. The KVPs are measured as the most safe investment tool, as it has the backing of the Government of India. The principal is assured (guaranteed) and it is deemed to be a safe avenue for investing your money. KVP is suitable for an increase in investment as it accumulates money at a fixed rate, and money doubles at the end of the specified period. It is for those looking for guaranteed returns.
Who can purchase
- An adult in his own name or on behalf of a minor,
- A minor,
- A Trust,
- Two adults jointly.
Available for purchase/issue at Post Offices.
With effect from 1st March, 2003, invested amount doubles on maturity after Eight Years and Seven months.
Nomination facility is available.
Denomination / Deposit limits
- Certificates are available in denominations (face value) of Rs. 100, Rs. 500, Rs. 1000, Rs. 5000, Rs. 10,000 & Rs. 50,000.
- There is no maximum limit for purchase of the certificates.
No income tax benefit is available under the scheme. However the deposits are exempt from Tax Deduction at Source (TDS) at the time of withdrawal.
Premature encashment of the certificate is not permissible except at a discount in the case of death of the holder(s), forfeiture by a pledgee and when ordered by a court of law.
Place of Encashment/discharge on maturity
Can be encashed/discharged at the post office where it is registered or any other post office.
Who can open account under the scheme
An individual :
- in his own name,
- on behalf of a minor of whom he is a guardian,
- a Hindu Undivided Family.
Where to open an account
- at designated post offices throughout the country and
- at designated branches of Public Sector Banks throughout the country.
- The account matures for closure after 15 years.
- Account can be continued with or without subscriptions after maturity for block periods of five years.
Nomination facility is available.
Deposit limits
- Minimum deposit required is Rs. 500 in a financial year.
- Maximum deposit limit is Rs. 70,000 in a financial year.
- Maximum number of deposits is twelve in a financial year.
Loans from the amount at credit in PPF account can be taken after completion of one year from the end of the financial year of opening of the account and before completion of the 5th year. The amount of withdrawal cannot exceed 40% of the amount that stood to credit at the end of fourth year preceding the year of withdrawal or at the end of preceding year whichever is lower.
Premature withdrawal is permissible every year after completion of 5 years from the end of the year of opening the account.
- Account can be transferred from one post office to another post office,
from a bank to another bank; and - from a bank to post office and vice-versa.
Depositor is provided with a pass book with entries of the deposited amounts, interest credited every year and other particulars duly stamped by the post Office.
Interest
· Interest at the rate, notified by the Central Government from time to time, is calculated and credited to the accounts at the end of each financial year. · Present rate of interest is eight per cent / per year since: 1st March, 2003.
Income Tax relief
- Income Tax rebate is available ‘on the deposits made’, under Section 88 of Income tax Act, as amended from time to time.
- Interest credited every year is tax-free.
