Post Office Savings

In turbulent times like these, safety of the investment is of utmost priority among people. For ages we have been hearing/seeing/using the post office for sending letters, documents etc. What the current generation does not know about the post office is the fact that, it has been an investment heaven for our fathers and their fathers. Ask somebody who is in their sixties, one of the top 3 choices for investment would be the Post Office.

Since the post office is owned by the Government of India whatever money we invest in it is totally 100% safe and secure. Whats more they give us competitive rate of interest on our investment as well.

Post Office Savings

Post Office Saving Facts

Post Office Saving is the best form of savings schemes which provide substantially higher rates of interest and pose relatively lesser risks of suffering losses. Therefore, they are widely accepted among the different sections of the Indian society and among the different age groups.

The Indian postal sector has started numerous Post Office Saving schemes like:

  • Post Office Time Deposits
  • Deposit Scheme for Retiring Government Employees
  • Post Office Monthly Income Scheme
  • Post Office Recurring Deposits
  • Deposit Scheme for Retiring Employees of Public Sector Companies
  • National Savings Scheme
  • National Savings Certificates
  • Postal Life Insurance
  • Public Provident Funds
  • Kisan Vikas Patra

Let us look in detail about some of the best investment options using the Post Office.

Post office time deposits

The post office time deposits scheme fall under the category of fixed deposits and are available at all the post offices throughout India. The investors are not entitled to receive any amount towards interests on a monthly basis but receive a lump sum amount as interest when the scheme matures. The interest rate in case of these schemes is directly proportional to the tenure of the scheme. The minimum amount required to start the post office time deposits scheme is only Rs. 200 but there is no set limit for the maximum amount. The scheme allows nomination facility and the tenure of the scheme ranges from 1-5 years. The rate of interest varies according to the tenure of deposit. For example, the interest rate for the post office time deposits scheme of 1 year is 6.25% per annum, 6.50% for 2 years per annum, 7.25% for 3 years per annum, and 7.50% for 5 years per annum.

Though banks today offer a much higher rate of interest on term deposits, post office being owned by the government of India safety is 100%

Post office monthly income scheme

The monthly income scheme also falls under the category of fixed deposits and the tenure of this scheme is 6 years. The post office has made it a rule to accept only a single deposit in an account and the monthly income schemes are available in all the post offices in India. The minimum amount required to be submitted to start this scheme is Rs. 1,000, a maximum amount of Rs. 3 lakh in case the account is held by a single individual and Rs. 6 lakh in case it is a joint account. The rate of interest has been fixed at 8% per annum and the investors are entitled to receive monthly interest payments. The investors are also entitled to a bonus amount of 10% on the total loan amount which is paid when the scheme matures. The investors have the facility to get income tax relief in accordance with Section 80C of Income Tax.

Kisan Vikas Patra

Kisan Vikas Patra certificates are secured by the backing of the central government of India which makes it the most effective post office saving. The best thing about Kisan Vikas Patra certificates is that the deposited amount doubles itself after the completion of stipulated period and the rate of interest offered by the post offices for these certificates remain same throughout the loan period. The tenure of Kisan Vikas Patra certificates is 8 years and 7 months. The face value of Kisan Vikas Patra certificates range from Rs. 100 to Rs. 50,000.

Post office recurring deposit

The tenure of the post office recurring deposit accounts is 5 years which comprise of 60 equal monthly deposits of at least Rs.10 towards each installment. Default of at the most 4 payments are considered and forgiven by charging a minimal default fee. As the post office recurring deposit scheme matures, the investor of Rs. 10 denomination account is paid a sum of Rs. 728.90.

Public provident funds

The public provident funds can be started with a sum of Rs. 500 and can extend to Rs. 70,000 and the account can be shifted from a post office to another post office or from a post office to a bank or from one bank to another. The interest change varies every year and is entitled to income tax rebates under Section 88 of Income Tax Act.

Summary

I hope this article would be more useful for those who want to invest in the post office. Post office is need not be used only for sending the parcel to India. It is good investment option for senior citizens and house wife who want to save the money by depositing each month. There is no risk on investing on the post office. If you have any doubts, please post it in the comments section.

Subscribe to our future articles here.
email
, ,

18 Responses to “Post Office Savings”

  1. Dhaval Says:

    Sir,
    I am an NRI. i know that i cannot invest in post smallsavings. So at present I transfer my NRI income directly to my wife’s saving account in india. Then she will inveest the same in small savings like MIS/nsc/kvp with first her name & second my name as a joint holder. I want to know she can invest like this way or not. Also inrterest income generated from this savings will be her individual or will be clubbed to my income in india. Also let mwe know she can put jointly my name or not as i am a nri.
    Please clear me.
    Thanks
    dhaval

    Reply

  2. Dhaval Says:

    Sir,
    I am an NRI. i know that i cannot invest in post smallsavings. So at present I transfer my NRI income directly to my wife’s saving account in india. Then she will inveest the same in small savings like MIS/nsc/kvp with first her name & second my name as a joint holder. I want to know she can invest like this way or not. Also inrterest income generated from this savings will be her individual or will be clubbed to my income in india. Also let mwe know she can put jointly my name or not as i am a nri.
    Please clear me.
    Thanks
    dhaval

    Reply

  3. kumar Says:

    80L is abolished! from where you get the information

    Reply

  4. bhavesh v.choksi Says:

    post office ke naye cir. ke mutabik within a month rs. 50000 ka investment hoga toh pancard ki copy deni hoi per hamare mitra rs.30000 ka invest kar ne gaya toh pancard ki copy surat (nanpura h.o.) office wale mang rahe hai. hamne bahesh kane per hame bataya ki ke mahine main aap rs.50000 ya usse jyada ka invest kiya hai ya nahi hame kaise pata chalaga? shayad aap ne dusri post main kiya hoga toh hame kaise pata chalega. post wale kahte hai ki naye kanun ke mutabik aap ne rs.50000 ya unse jyada ka invest ek mahine mai kar rahe he toh pancard dena hoga. per hame rs.30000 ke invest pe kyo pancard copy deni hogi? aap concern post master ya ssp.saab se heh bare main baat karne
    ki krupa kare.

    Reply

  5. B B CHADHA Says:

    Please clarify ,can NRIs open Monthly Income Scheme a/cs.
    can NRIs invest in National Savings certificates or Kissan Vikas Patras

    Reply

  6. chandanisingh Says:

    i want to invest Rs 50000 under a fixed deposit scheme which is the best one which will give me a good return for my daughters marriage or for her further studies.

    Reply

  7. Namratha Iyer Says:

    Hi, in post-office FD and monthly-income scheme if it comes under tax benefit scheme will the interest be taxed?

    Reply

  8. Sal Says:

    Can NRIs invest in National Savings certificates or Kissan Vikas Patras.
    thank you for your assistance.

    Reply

  9. RAMA SASTRY Says:

    Sir,
    On Maturity whether POMIS Deposit+Bonus could be asked to credit
    to the Savings A/c Maintained in the same Post Office and getting maintained by the Same Joint Depositors of POMIS

    Reply

  10. sreejith Says:

    how can i get the intrest ,

    Reply

  11. r Says:

    confirm the maturity value for 10000 on NSC on the new 5 years NSC and at the time of maturity any TDS will be deducted on such deposits since no amount has been deducted for 6 years scheme by governmet presently.

    if advised, if TDS deducted we want to stop investing NSC with blockage period of 5 years and 6 years presently will start invest in ba nk deposits at anytime one can take back the amount if want to cancel in banks deposits.

    Please advise.

    thanks

    Reply

  12. RAJIV KUMAR Says:

    i m a small business man . i have 6 r d saving account i want to ask that is this necessary to pay all amount before 15 of the every months

    Reply

  13. Anjaneyulu Says:

    iam anjneyulu from kurnool.i want infermation of deposits in postoffice.and explain about schems

    Reply

  14. Fool Telugu Says:

    @ Anjaneyulu

    U mad & senseless GULTY…… Google it, read & understand…. Dt cme n post here tat u want sme crap info!!!

    Hae sme basic common sense

    Reply

  15. Bishay Says:

    For the Post office Time Deposit Scheme-
    Is is done only as a lumpsum investment or can we invest in it whenever we have some money?

    Reply

Trackbacks/Pingbacks

  1. Tax Deduction on Post Office Savings Account - July 1, 2011

    [...] notification sent by the Central Board of Direct Taxes (CBDT) regarding the tax deduction for the Post Office Savings account. Currently there is no tax deducted for the interest income from the post office savings [...]

Leave a Reply

Current month ye@r day *