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There are a number of savings schemes offered by Post Offices for different types of investors.

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Post Office Savings Schemes at a Glance

Post Office has long served as the backbone of communication and small deposits. For more than 150 years the department of Posts has played a pivotal role in facilitating communication throughout the nation thereby aiding in socio-economic development of the country.

Post Offices offer varied services. Their work is not just restricted to delivering mails. They accept deposits, provide retail services like sale of forms, bill collection etc, provide savings schemes, life insurance cover etc.

With a network of more than 1.5 lakh post offices across the country, India Post offers various Post Office Saving Schemes. These are risk free investment options that are safe and secured and provide you with capital gains without Tax Deduction at Source (No TDS).

These savings schemes come at attractive rates with nomination facility and are transferable to any Post Office across India. Let us have a quick glance at various post office savings schemes.

Post Office Savings Schemes in India

Post Office One Time Deposit Scheme
In this scheme the interest is calculated quarterly but it is paid to you annually. Following are other highlights –
  • It comes with a facility of redeposit on maturity of an account.
  • Minimum amount of deposit is Rs 200/- and in multiples of Rs 200/- thereafter. There is no limit on maximum amount being invested.
  • Time deposits can be opened for a span of 1 year, 2 years, 3 year and 5 years.
  • Investment by Trust, Regimental Fund or Welfare Fund is prohibited.
  • Interest income is taxable.
  • Group Accounts, Institutional Accounts and Miscellaneous accounts are not allowed.
  • Account can be pledged as security against a loan to banks/ Government institutions.
  • If you plan for a premature closure of 1 year, 2 Year, 3 Year or 5 Year account on or after 01.12.2011 between 6 months to one year from the date of deposit, simple interest at the rate applicable to from time to time to post office savings account shall be payable.
  • This account can be opened and operated by any individual - a single adult or two adults jointly.
  • Income Tax Rebate under section 80C of IT Act for an Investment up to Rs 1,00,000/- per annum can be availed.
  • 2 year, 3 year or 5 year accounts on or after 01.12.2011 - if closed after one year, interest on such deposits shall be calculated at a discount of 1% on the rate specified for respective period as mentioned in the concerned table given under Rule 7 of Post office Time Deposit Rules.
RATE OF INTEREST is as follows -
  • One Year       8.2%
  • Two Years     8.3%
  • Three Years 8.4%
  • Five Years     8.5%
Post Office Monthly Income Scheme (MIS) This is quite an apt scheme for retired employees/ senior citizens and for those who need regular monthly income. Following are the highlights of this scheme
  • Interest rate of 8.5% per annum payable monthly w.e.f. 01.04.2012
  • A single account can hold maximum amount up to Rs. 4.50 lakhs and in case of a joint account a total of Rs.9 lakhs is permissible.
  • Maturity period is 5 years.
  • w.e.f. 01.12.2011 you cannot claim Bonus on Maturity.
  • There is no Tax rebate
  • Tax Deduction at Source (TDS) is not applicable.
  • Minimum investment amount is Rs.1500/- or in multiple thereafter.
  • You can avail a facility of premature closure of account after 1 year but on or before 3 years @ 2.00% discount.
  • Account can be opened by an individual, two/three adults jointly, and a minor through a guardian.
  • There would be a deduction of 1% if account is closed prematurely at any time after three years.
  • It also provides you with auto credit facility of monthly interest to saving account if accounts are at the same post office.
  • This scheme provides minors with a separate limit of investment of Rs. 3 lakhs and the same is not compiled with the limit of the guardian.
  • Opening of this account by Non-Resident Indian / HUF is not permissible.
Public Provident Fund (PPF) Scheme This PPF Scheme serves to be the most sought after and beneficial investment option for both salaried as well as self employed classes. Here are the highlights-
  • Interest rate of 8.8% per annum w.e.f. 01.04.2012.
  • Non-Resident Indians (NRIs) do not qualify for this scheme.
  • There is no tax applicable on the interest that gets accrued.
  • The time span for which the scheme operates is for 15 years.
  • You may opt for this scheme with a Minimum deposit of Rs 500/- per annum and it may range to a Maximum deposit of Rs. 1,00,000/- per annum.
  • Investment on behalf of HUF (Hindu Undivided Family) or Association of persons by an individual is not permissible.
  • 6th financial year permits you with withdrawal facility.
  • Income Tax Rebate under section 80C of IT Act for Investment up to Rs 1,00,000/- per annum can be earned.
  • It is mandatory for you to at least make one deposit with a minimum amount of Rs 500/- in each financial year.
  • 3rd financial year would bring Loan facility to you in the scheme up to 5th financial year. The rate of interest charged on loan taken by the subscriber of a PPF account on or after 01.12.2011 shall be 2% p.a. However, the rate of interest of 1% p.a. shall continue to be charged on the loans already taken or taken up to 30.11.2011.
  • You can make deposits in lump sum or in 12 installments.
Senior Citizen’s Savings Schemes
  • Interest @ 9.3% per annum from the date of deposit on quarterly basis w.e.f. 01.04.2012
  • There is no age restriction for the retired personnel of Defence services provided they fulfill other specified conditions.
  • You may begin with a minimum deposit of Rs 1000 and multiples thereof and carry it forth to a Maximum deposit of 15 lakhs.
  • It provides you with premature closure after one year but a deduction of 1.5% of the deposit is made and after 2 years a deduction of 1%.on premature closure becomes applicable.
  • The Maturity period in this scheme is 5 years and can be further extended for a period of 3 years.
  • Non-resident Indians (NRIs) and Hindu Undivided Family (HUF) are not permitted to open this account.
  • If the interest amount is more than Rs 10,000/- per annum, TDS is deducted at source on interest.
  • You cannot go for any withdrawal before the expiry of a period of 5 years from the date of opening of the account.
  • Your Age should be 60 years or more, and 55 years or more but less than 60 years for those who have 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.
  • If your savings account is also held in the same post office then you may get your interest amount automatically credited to the savings account.
  • You are entitled to open this account individually or in joint names with your spouse.
  • Income Tax Rebate under section 80C of IT Act for Investment up to Rs 1,00,000/- per annum can be earned.
National Savings Certificate (NSC) These certificates come with duration of 5 years and 10 years. Following are the highlights -
  • NSC IX Issue (10 years) - Interest rate of 8.9% per annum w.e.f. 01.04.2012
  • NSC VIII Issue (5 years) – Interest rate of 8.6% per annum w.e.f. 01.04.2012
  • Investment by Trust and HUF is not permissible.
  • There is no Tax Deduction at Source.
  • You need to make a Minimum investment Rs. 100/- and there is no limit to maximum amount that you can invest.
  • Income Tax Rebate under NSC - section 80C of IT Act for Investment up to Rs 100,000/- per annum can be earned.
  • A single holder type certificate can be purchased by an adult for himself or on behalf of a minor or to a minor.
  • You can avail secured loans from banks and financial institutions against these certificates.
  • NSC - section 80C of IT Act also allows interest accruing annually but deemed to be reinvested for deduction.
Post Office Savings Account Following are the highlights of the savings account in post office
  • Rate of interest 4.0% per annum
  • You can avail cheque facility.
  • Anyone can open a savings account in the post office.
  • There is a restriction on Group Account, Institutional Account, other Accounts like Security Deposit account & Official Capacity account.
  • The interest that earned through this account is tax free.
  • You need to put in Minimum amount Rs 50/- in case of non-cheque account and if you wish to avail a cheque account then you need to start with Rs.500/-.
  • The Maximum balance that you can hold in a single account is Rs 1,00,000/- and you can hold up to Rs 2,00,000/- in a joint account.

  • T Chandrasekhar:
    I want to Invest Rs 50,000 each on my Daughters (Age: 6 yrs & 15 yrs) which is received as bonus from my Company. Please suggest the best one.
    22-Nov-2016 07:12 PM
  • Nem Kumar Jain:

    With effect from 01 Apr 2016 the interest rate for NSC 5 years maturity period has been reduced to 8.10% compounded half yearly. Accordingly the maturity amount for Rs 10000/- should be Rs 10000*(1+8.1/200)^10 which equals to Rs 14874/- whereas it has been shown as Rs 14761/-. Therefore there is a difference of Rs 113/- in maturity value. You are requested to reconcile and issue the correction according.
    01-Jun-2016 02:43 PM
  • Sachin Gupta:
    Want to open Saving Account in Post office, So need to know more details what is the procedure to open an account ?
    01-Mar-2016 09:18 AM
  • Venkataramamohanarao:
    I request government to open online deposit in post office in india
    06-Dec-2015 05:46 PM
  • T.R.Rao:
    Post office Recurring Deposit Scheme - give fugu details
    02-Oct-2015 04:22 PM
  • Purnima:
    India post scheme for girls Sukaniya Samridhi yojna.Please give pros and cons of this scheme.
    05-Jun-2015 09:53 PM
  • r k bansal:
    may we deposit diferent amount in PPF account each year or it is necessary to deposit a fixed amount.
    30-Mar-2015 06:40 PM