Post Office Small Saving Schemes: India Post Office Small Savings Schemes-or simply, Post Office Small Savings Schemes-offer tax benefits, are reliable and are risk-free investments that once can invest in. One can open a savings account in a post office, just like in banks, and earn a fixed rate of interest. Also Read - India Post Delivers 2,000 Tonnes of Medicines, Equipment Amid Coronavirus Pandemic Lockdown
Following are some of the main features of post office small savings schemes: Also Read - After Lockdown Extension, Hockey India Postpones All National Championships Indefinitely
- A minimum balance is needed to maintain cheque and non-cheque facility accounts. While it is Rs 500 for cheque facility, for non-check, it is one-tenth, i.e Rs 50;
- Subscribers can appoint a nominee for the account;
- Nomination facility is available under this scheme;
- You can have only one post account in one post office;
- To keep the account active, an account holder has to do at least one withdrawal or deposit in three financial years. This can be a cash deposit or withdrawal;
- Since financial year 2012-13, interest earned is tax-free up to Rs 10,000 per year
Notably, any Indian citizen above the age of 18 is eligible to open an account under the post office tax savings schemes. He/she can open an account either individually, or on behalf of a minor. Also two-three adults can open joint accounts. Also Read - GDS Exam 2019: India Post, Gujarat Circles Releases Gramin Dak Sevaks Results; Check Selection List at appost.in
Following are some of the advantages of opening an account under post office small savings schemes:
- It is very easy to enroll into and gives a fixed interest over a long period of time;
- Since it involves limited paperwork, it is suited for and accessible to rural and urban area investor;
- Individuals can choose and elect nominees for their accounts;
- Two schemes: Public Provident Fund and Sukanya Samriddhi Yojana fall under the EEE (investment amount, interest earned and maturity amount are exempted from tax) category
Types of Post Office Savings Schemes and how they compare to each other: The different post office savings schemes are Post Office Savings Account, National Savings Recurring Deposit Account, National Savings Time Deposit Account, National Savings Monthly Income Account, Senior Citizens Savings Scheme Account, Public Provident Fund and Sukanya Samriddhi Yojana.
|Account||Interest Rates||Minimum Tenure||Minimum Investment Amount|
|Post Office Savings Account||4% p.a on individual and joint accounts||N/A||Rs 20|
|National Savings Recurring Deposit Account||7.2% p.a (compounded quarterly)||5 years||Rs 10/month|
|National Savings Time Deposit Account||6.9% p.a for 1, 2 and 3 years; 7.5% for 5 years||1 year||Rs 100|
|National Savings Monthly Income Account||7.6% p.a||5 years||Rs 20|
|Senior Citizens Savings Scheme Account||8.6% p.a||5 years||Less than Rs 1 lakh and in multiples of 10 for cash; Rs 1 lakh or above for cheque|
|Public Provident Fund||7.9% p.a||15 years||Rs 100|
|Sukanya Samriddhi Yojana||8.4% p.a||21 years||Rs 250|
National Savings Recurring Deposit Account: Here, one can invest a fixed amount of money at regular intervals for five years. On maturation after five years, the amount (principal as well as interest earned) is paid back to the individual. Also, one can open multiple accounts in a post office; however, a period investment is required to keep the account active.
National Savings Time Deposit Account: In this scheme, while the interest is payable annually, it is calculated quarterly. The account can be opened for one, two, three and five years. On maturation, the account is automatically renewed for the period it was initially opened for.
National Savings Monthly Income Account: This can be opened by two-three adults. For a joint account, the maximum investment limit is Rs 4.5 lakh, that for a single account is Rs 9 lakh. Also, one can open multiple accounts in a single post office subject to certain conditions. You can also withdraw your investment prematurely after completion of 12 months; for this, 2% of deduction will be made from your investment.
Senior Citizens Savings Scheme Account: This scheme, as the name suggests, is for senior citizens, i.e those over 60 years old. The maximum amount that one can invest currently is Rs 15 lakh. Those above 55 years of age but below 60 can also open this account subject to certain conditions.
Public Provident Fund: The scheme with largest investors, PPF doesn’t allow premature closure or joint accounts. Its key feature is the 15 year lock-in period. While loans against this account can be availed from the third year, withdrawals, that too partial, are allowed from the seventh year.
Sukanya Samriddhi Yojana: Under this scheme, which is listed under the ambitious ‘Beti Bachao, Beti Padao’ programme, parents or legal guardians can open an account on behalf of a girl child. There is no tax on the investment amount, interest earned and maturity amount