The main financial services offered by the Department of Posts are the Post Office Savings Bank. It is the largest and oldest banking service institution in the country. The Department of Posts operates the Post Office Savings Scheme function on behalf of the Ministry of Finance, Government of India. Under this scheme, more than 20.50 crores savings account are operated. These accounts are operated through more than 1,54,000 post offices across the country
Indian Post offers several Savings Schemes which are: backed by the Government of India
safe, secure and risk-free investment options
not deducting any Tax at Source ( NO TDS)
providing nomination facility
transferable to any Post Office anywhere in India
offering attractive rates of interest.
TYPES OF POST OFFICE SCHEMES
Following are schemes offered by post office:
(1) Recurring Deposit Account (RDA):
Amount of Investments: min - Rs. 10 p.m. or any amount in multiples of Rs. 5
Amount of Investments: max - No maximum limit
Payment Terms: The deposit shall be paid as monthly installments
Maturity Terms: One withdrawal is allowed after one year of opening a post-office RDA or You can withdraw up to half the balance lying to your credit at an interest charged at 15%
Returns: The PO RD offer a fixed rate of interest, currently at 8.40 %p.a. compounded qtr.
Tax Considerations: Interest is liable to tax however there is No TDS from interest
(2) Post Office Monthly Income Scheme (MIS):
Feature: MIS provides a source of regular income on a long term basis
Amount of Investments: Rs 15,000/- and above
Returns: The post-office MIS gives a return of 8.50% plus a bonus of 5 per cent on maturity*.
Maturity: The duration of MIS is 5 years. However, premature closure of the account is permitted any time after the expiry of a period of one year of opening the account.
Tax Considerations: Interest is liable to tax however there is No TDS from interest
Other considerations: Only one deposit is permitted and Only individuals can open the account
*for accounts opened before 1st December 2011, not payable thereafter
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(3) Time Deposit:
Features: Time Deposit is a banking service similar to a Bank Fixed Deposit offered by Department of post, Government of India at all post office counters in the country. This scheme is meant for those investors who want to deposit a lump sum of money for a fixed period.
Amount of Investment: minimum- Rs 200; maximum- no limit
Maturity: Time Deposits can be made for the period of 1 year, 2 years, 3 years and 5 years.
Returns: This investment option pays annual interest rates of 8.20%, 8.30%, 8.40% and 8.50% respectively, compounded quarterly.
Tax Considerations: Interest is liable to tax however there is No TDS from interest
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(4) Senior Citizen Scheme:
Features: "Senior Citizens Savings Scheme" is launched for Citizens of 60 years of age and above. Citizens who have retired under a voluntary or a special voluntary retirement scheme and have attained the age of 55 years are also eligible, subject to specified conditions
Maturity: Maturity period of the deposit will be five years, extendable by another three years.
Returns: The deposit will carry an interest of 9.30% per annum
Tax Considerations: Interest is liable to tax however there is No TDS from interest
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(5) Public Provident Fund:
The rate of interest is 8.80% p.a. compounded annually w.e.f. 1st April 2012.
The minimum deposit is 500/- p.a
The maximum is Rs. 1,00,000/- p.a
Interest is totally tax free.
Tax saving instrument under section 80C.
Loan facility available from third year.
The Public Provident Fund Scheme is a statutory scheme of the Central Government of India.
The Scheme is for 15 years.
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|
w.e.f. 1.12.2011 |
w.e.f. 1.4.2012 |
| Savings Deposit |
4.0 |
4.0 |
| 1 year Time Deposit |
7.7 |
8.2 |
| 2 year Time Deposit |
7.8 |
8.3 |
| 3 year Time Deposit |
8.0 |
8.4 |
| 5 year Time Deposit |
8.3 |
8.5 |
| 5 year Recurring Deposit |
8.0 |
8.4 |
| 5 year SCSS |
9.0 |
9.3 |
| 5 year MIS |
8.2 |
8.5 |
| 5 year NSC |
8.4 |
8.6 |
| 10 year NISC |
8.7 |
8.9 |
| PPF |
8.6 |
8.8 |
|
