Post Office Schemes

These are offered by the Government of India and are a safe, secure and a risk free investment option. They include Monthly Income Scheme, Term Deposit, Public Provident Fund (PPF), National Savings Certificate (NSC), Kisan Vikas Patra (KVP), Senior Citizens Savings Scheme (SCSS) and Sukanya Samriddhi Yojana (SSY) Scheme. The minimum investment required is Rs. 500 per annum. The PPF and NSC also qualify for tax deduction under section 80C.NSC, PPF and Sukanya Samriddhi are schemes where interest rates are not fixed and reviewed on quarterly basis by the government.

A low risk investment which has always been popular amongst Indians has been the post office small savings scheme. These schemes also offer tax benefits, are reliable and are risk-free investments that one can invest in. Like with a bank, one can also open a savings account with a post office and earn a fixed rate of interest.



Features of Post Office Schemes

  • They are a safe and a secure investment option offered by the Government of India.

  • There is no tax deduction at source (TDS) except in Senior Citizen Scheme.

  • They come with the facility of nomination.

  • There is a provision of changing the nomination anytime. They can be transferred anywhere within the country.

  • They offer an attractive rate of interest They can be held jointly or solely 

Post-Office-Monthly-Scheme

Post Office Monthly Income Scheme

  • Account may be opened by individual or jointly by two/three adults NRIs/ HUF cannot open account

  • Interest is paid monthly

  • Interest rate is fixed at the time of investing and stays the same for entire tenure

  • Premature encashment facility is available only after 1 year with penalty of 2% & 1 % if prematurely broken between 1-3 yrs & 3-5 yrs respectively

  • Interest income is taxable but there is no TDS

  • Nomination facility available

  • Most suitable scheme for senior citizens and for those looking for a regular monthly income

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Post-Office-Term-Deposite-Scheme

Post Office Term Deposit Scheme

  • Account holder can be individual, joint or minor above the age of 10 years

  • Account cannot be opened by NRIs/ HUF

  • Minimum amount of deposit is Rs 200/- and there is no maximum amount

  • Facility of redeposit is available after maturity

  • Account can be closed after 6 months but before 1 year without interest

  • Interest income is tax payable

  • Deposits are exempted from Wealth Tax

  • No TDS

  • Interest is payable annually but is calculated quarterly

  • Interest rate is fixed at the time of investing and stays the same for entire tenure

  • Nomination facility is available

  • Account can be transferred from one post office to any other in India

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Post-Office-NSC

National Savings Certificate

  • A Tax saving instrument under SEC 80C

  • Can be purchased individually or jointly or by minor through guardian Cannot be purchased by companies, societies, trusts, NRIs, HUFs

  • Minimum investment is of Rs 500/- and no limit from maximum amount

  • Annual interest has to be reinvested and qualifies for tax rebate for first 5 years under section 80C

  • Facility of reinvestment on maturity Interest is floating and is accrued as per prevailing rate of a particular financial year

  • Certificates can be transferred before maturity but cannot be encashed

  • Interest income is taxable but no TDS Deposits are exempted from wealth tax

  • Nomination facility available

  • Facility of getting a duplicate certificate available in case of loss of original one 

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Post-Office-Kisan-Vikas-Patra

Kisan Vikas Patra

  • Money gets doubled in fixed tenure

  • Encashment facility available after 2 years 6 months

  • Can be purchased by individuals, 2 adults jointly or minor over age of 10 years through guardian

  • Cannot be purchased by companies, societies, trusts, NRIs, HUFs

  • Facility of reinvestment on maturity

  • KVPs can be transferred from one person to another

  • Interest income is taxable but no TDS

  • Interest is fixed at the time of investment

  • Deposits are exempted from wealth tax

  • Nomination facility available

  • Facility of getting a duplicate KVP is available in case of loss of original one

  • Facility of purchase/payment of KVP to holder of power of attorney

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Post-Office-Senior-Citizens-Savings-Scheme

Senior Citizens Savings Scheme

  • Main objective of its launch in 2004 was to check the decline in interest income of senior citizens

  • Interest is payable quarterly

  • Interest rate is fixed at the time of investing and stays the same for entire tenure

  • Minimum deposit Rs 1000/- and maximum Rs 15 Lacs

  • Premature closure facility available with penalty

  • Individuals of age 60 years and above can invest

  • Retiring individuals under V.R.S age 55 years can invest within 03 months of V.R.S. with documentary evidence

  • Facility of joint account with spouse

  • Investment is completely risk free 

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Post-Office-Savings-Bank

Post Office Savings Account

  • Minimum amount of Rs 20/- can be invested, in cash

  • Minimum amount of Rs 50/- can be invested , in cheque

  • Minimum balance of Rs 500/- has to be maintained in cheque account

  • Maximum balance permitted is Rs 1 lakh in single account

  • Maximum balance permitted is Rs 2 lakh in joint account

  • Account can be open on behalf of minor also

  • Interest of P.O. Saving a/c in tax free 

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Post-Office-Public-Provident-Fund

Post Office Public Provident Fund

  • It is a statuary scheme of Central Govt of India

  • The scheme is for 15 years

  • One deposit of Rs 500/- is compulsory in each financial year Interest is compounded annually

  • Interest is floating and is accrued as per prevailing rate of a particular financial year

  • The deposit need not be made every month

  • Thus it suits the convenience of the investor

  • An account where the deposit is not made, is termed as discontinued account and it can’t be closed before maturity It can be reactivated by paying the minimum deposit (Rs. 500/-) and a penalty of Rs 50/-

  • Withdrawal is permissible every year from 7th financial year 50% of balance amount

  • Joint account is not permissible

  • Premature closure is not permissible unless it’s a case of death

  • Deposits in PPF qualify for rebate under section 80-c of Income Tax Act

  • The interest is totally tax free Nomination facility is available

  • Loan facility available from 3rd financial year

  • The best option for long term investments

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Post-Office-Sukanya-Samriddhi-Yojana

SukanyaSamriddhiYojana (SSY) Scheme

  • The account can be opened by a parent or legal guardian of the girl child

  • The girl child must be below the age of 10 year

  • Only one account is allowed for a girl child

  • A family can open only 2 SSY scheme account

  • The account matures after 21 years of opening the account or in the event of the marriage of the girl child after she gains the age of 18 years

  • A premature withdraw up to 50% of investment is allowed after the child gains the age of 18 years even if she is not getting married

  • Interest is floating and is accrued as per prevailing rate of a particular financial year

  • Interest is taxfree

  • The principal amount is deductible under section 80C up to Rs 1.5 lakh

  • Minimum Investment: Rs 1,000 per annum

  • Maximum Investment: Rs 1.5 lakh per annum

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