Post Office Saving Schemes: SCSS, KVP, NSC, MIS and more
Post Office offers Saving Schemes including Monthly Income Scheme, Public Provident Fund, Sukanya Samriddhi Yojana, Kisan Vikas Patra, National Savings Certificate, Monthly Income Scheme, Term Deposit and Senior Citizens Savings Scheme.
Post Office investment schemes are considered to be a safe haven for depositors looking to invest their capital to earn decent returns. However, an individual should understand everything about these investment plans. Post Office Savings Schemes like Senior Citizens Savings Scheme (SCSS) and National Savings Certificates (NSC) provide slightly higher returns than regular Fixed Deposits (FDs) of the banks. It may be noted that the mentioned instruments are controlled by the central government, which periodically revises the rates every quarter.
Post Office Savings Account (SB)
People wishing to open a savings account with the Post Office can enjoy a 4 per cent interest rate on their deposits. A person can open an account with Rs 500 minimum balance. The rules allow a depositor to open only one single account. It is mandatory to mention the nominee at the time of opening of account. Under Section 80TTA of the Income Tax Act, from all Savings Bank Accounts, interest up to Rs. 10,000 earned in a Financial Year is exempted from taxable Income.
National Savings Recurring Deposit Account (RD)
Post Office provides 6.7 per cent on 5-year National Savings Recurring Deposit Account (RD). The minimum amount for opening of account and maximum balance that can be retained is Rs 100/- per month or any amount in multiples of Rs 10/-. There is no maximum limit.
National Savings Time Deposit Account (TD)
The Post Office Time Deposit scheme is similar to banks offering Fixed Deposit plans for its customers. TD schemes are for 1 year, 2 year, 3 year, and 5 year. Tenure. An individual can open an account with a minimum of Rs 1000 and a multiple of Rs 100. There is no maximum limit for investment. The interest is paid annually. If a depositor chooses a 5 year TD, then the investment qualifies for the benefit of section 80C of Income Tax Act, 1961.
National Savings Monthly Income Account (MIS)
Post Office Monthly Income Scheme Account (MIS) is a very popular scheme. The minimum amount for opening of account and maximum balance that can be retained is - in multiples of Rs 1000/-. PO allows a maximum investment of Rs 9 lakh in a single account and Rs 15 lakh in a joint account. The depositor is entitled to get a 7.4 per cent interest rate per annum which is payable monthly.
Senior Citizens Savings Scheme
The retirees can open a Senior Citizens Savings Scheme account (SCSS) with the Post Office. As per the existing rules, account holders will get 8.2 per cent interest rate per annum, payable from the date of deposit to 31st March/30th Sept/31st December in the first instance and thereafter, interest shall be payable on 1st April, 1st July, 1st October and 1st January. People above 60 years of age or retired civilian employees above 55 years of age and below 60 years of age, subject to condition that investment to be made within 1 month of receipt of retirement benefits, are eligible to open an SCSS account. A maximum of Rs 30 lakh is allowed as deposits.
Public Provident Fund
Public Provident Fund (PPF), considered to be one of the safe and secured modes of long-term investment in India, is available at the Post Office. The centrally government-controlled scheme provides interest rates of 7.1 per cent per annum (compounded yearly). The government revises the rates periodically. A minimum deposit of Rs 500/- and maximum investment of Rs 1,50,000/- is mandated in a financial year. The deposits can be made in lump-sum or in installments. The interest earned is tax free under Income Tax Act.
Sukanya Samriddhi Yojana
Ever since its launch on January 22, 2015, Sukanya Samriddhi Yojana (SSY) has turned out to be a very popular scheme among parents having a daughter. Post Office allows a guardian to open a SSY account in the name of girl child below the age of 10 years. An account can be opened with a minimum initial deposit Rs 250 and a maximum deposit up to Rs 1.50 lakh in a financial year. The deposit can be made maximum up to completion of 15 years from the date of opening. The current rate of interest is 8.2 per cent per annum and the interest earned is tax free under Income Tax Act.
National Savings Certificates (NSC)
National Savings Certificates (NSC) scheme gives 7.7 per cent interest rate compounded annually but payable at maturity. The long-term saving plan cannot be prematurely closed before 5 years except the following conditions. The deposits qualify for deduction under section 80C of Income Tax Act.
Kisan Vikas Patra
Deposits under Kisan Vikas Patra (KVP) mature as prescribed by the Ministry of Finance from time to time as applicable on the date of deposit. Current interest rates stand at 7.5 per cent compounded annually. Money invested in this central government managed scheme doubles in 115 months (9 years and 7 months).
Mahila Samman Savings Certificate (MSSC)
Mahila Samman Savings Certificate accounts can be opened by a woman for herself or by the guardian on behalf of a minor girl. The maximum deposit is capped at Rs two lakh in an account. The current interest rate is 7.5 per cent per annum.