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Saturday, 25 May 2013

Seven Government Post Office Saving Schemes

Personal Money
and Tax Saver 
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. Today, i would like to bring forth to you the seven most useful government post office saving schemes that provides wonderful returns with small investments.

1. Post Office Savings Account

Interest payable, Rates, Periodicity etc.: 4.0% per annum on individual/ joint accounts.
Minimum Amount for opening of account and maximum balance that can be retained:
Minimum INR 20/- for opening

Salient features including Tax Rebate:-
  1. Account can be opened by cash only.
  2. Minimum balance to be maintained in a non-cheque facility account is INR 50/-.
  3. Cheque facility available if an account is opened with INR 500/- and for this purpose minimum balance of INR 500/-in an account is to be maintained.
  4. Cheque facility can be taken in an existing account also.
  5. Interest earned is Tax Free up to INR 3500/- per year in single and INR 7000/- in Joint account up to 2011-12 and up to INR 10,000/- per year either in single or joint account for 2012-13.
  6. Nomination facility is available at the time of opening and also after opening of account.
  7. Account can be transferred from one post office to another.
  8. One account can be opened in one post office
  9. Account can be opened in the name of minor and a minor of 10 years and above age can open and operate the account.
  10. Joint account can be opened by two or three adults.
  11. At least one transaction of deposit or withdrawal in three financial years is necessary to keep the account active.
  12. Single account can be converted into Joint and Vice Versa.
  13. Minor after attaining majority has to apply for conversion of the account in his name.

2. 5-Year Post Office Recurring Deposit Account
Interest payable, Rates, Periodicity etc.:
From 1.4.2013, interest rates are as follows:-
8.3% per annum (quarterly compounded)
  • On maturity INR 10/- account fetches INR 744.53.
  • Can be continued for another 5 years on year to year basis
  • Minimum Amount for opening of account and maximum balance that can be retained: Minimum INR 10/- per month or any amount in multiples of INR 5/-. No maximum limit

Salient features including Tax Rebate:-
  1. Account can be opened by cash/cheque and in case of cheque the date of deposit shall be date of presentation of cheque.
  2. Nomination facility is available at the time of opening and also after opening of account.
  3. Account can be transferred from one post office to another.
  4. Any number of accounts can be opened in any post office.
  5. Account can be opened in the name of minor and a minor of 10 years and above age can open and operate the account.
  6. Joint account can be opened by two adults.
  7. Subsequent deposit can be made up to 15thday of next month if account is opened up to 15th of a calendar month and up to last working day of next month if account is opened between 16th day and last working day of a calendar month.
  8. If subsequent deposit is not made up to the prescribed day, a default fee is charged for each default. After 4 regular defaults, the account becomes discontinued and can be revived in two months but if the same is not revived within this period, no further deposit can be made.
  9. There is rebate on advance deposit of at least 6 instalments.
  10. Single account can be converted into Joint and Vice Versa.
  11. Minor after attaining majority has to apply for conversion of the account in his name.
  12. One withdrawal up to 50% of the balance allowed after one year.
  13. Full maturity value allowed on R.D. Accounts restricted to that of INR. 50/- denomination in case of death of depositor subject to fulfilment of certain conditions.

3. Post Office Time Deposit Account
Interest payable, Rates, Periodicity etc.:
Interest payable annually but calculated quarterly.
 From 1.4.2013, interest rates are as follows:-
    Period      Rate
    1yr.A/c      8.20%
    2yr.A/c      8.20%
    3yr.A/c      8.30%
    5yr.A/c      8.40%

Minimum Amount for opening of account and maximum balance that can be retained:
Minimum INR 200/- and in multiple thereof. No maximum limit.

Salient features including Tax Rebate:-
  1. Account may be opened by individual.
  2. Account can be opened by cash/cheque and in case of cheque the date of realization of cheque in Govt. account shall be date of opening of account.
  3. Nomination facility is available at the time of opening and also after opening of account.
  4. Account can be transferred from one post office to another.
  5. Any number of accounts can be opened in any post office.
  6. Account can be opened in the name of minor and a minor of 10 years and above age can open and operate the account.
  7. Joint account can be opened by two adults.
  8. Single account can be converted into Joint and Vice Versa.
  9. Minor after attaining majority has to apply for conversion of the account in his name.
  10. 2,3 & 5 year account can be closed after 1 year at discount. Account can also be closed after six months but before one year with interest @post office savings account.
  11. The investment under 5 Years TD qualifies for the benefit of Section 80C of the Income Tax Act, 1961 from 1.4.2007.

4. Post Office Monthly Income Account Scheme
Interest payable, Rates, Periodicity etc.:
From 1.4.2013, interest rates are as follows:-
   8.40% per annum payable monthly
  • Minimum Amount for opening of account and maximum balance that can be retained:
  • In multiples of INR 1500/-.
  • Maximum investment limit is INR 4.5 lakhs in single account and INR 9 lakhs in joint account.
  • An individual can invest maximum INR 4.5 lakh in MIS (including his share in joint accounts)
  • For calculation of share of an individual in joint account, each joint holder have equal share in each joint account.
Salient features including Tax Rebate:-
  1. Account may be opened by individual.
  2. Account can be opened by cash/cheque and in case of cheque the date of realization of cheque in Govt. account shall be date of opening of account.
  3. Nomination facility is available at the time of opening and also after opening of account.
  4. Account can be transferred from one post office to another.
  5. Any number of accounts can be opened in any post office subject to maximum investment limit by adding balance in all accounts.
  6. Account can be opened in the name of minor and a minor of 10 years and above age can open and operate the account.
  7. Joint account can be opened by two or three adults.
  8. All joint account holders have equal share in each joint account.
  9. Single account can be converted into Joint and Vice Versa.
  10. Minor after attaining majority has to apply for conversion of the account in his name.
  11. Maturity period is 5 years from 1.12.2011.
  12. Interest can be drawn through auto credit into savings account standing at same post office, through PDCs or ECS.
  13. Can be prematurely encashed after one year but before 3 years at the discount of 2% of the deposit and after 3 years at the discount of 1% of the deposit. (Discount means deduction from the deposit.)
  14. A bonus of 5% on principal amount is admissible on maturity in respect of MIS accounts opened on or after 8.12.07 and up to 30.11.2011. No bonus is payable on the deposits made on or after 1.12.2011.

5. Senior Citizen Savings Scheme
Interest payable, Rates, Periodicity etc.:
From 1.4.2013, interest rates are as follows:-
  • 9.20% per annum, payable from the date of deposit of 31st March/30th Sept/31st December in the first instance & thereafter, interest shall be payable on 31st March, 30th June, 30th Sept and 31st December.
  • Minimum Amount for opening of account and maximum balance that can be retained:
  • There shall be only one deposit in the account in multiple of INR.1000/- maximum not exceeding INR 15 lakh.
Salient features including Tax Rebate:-
  1. An individual of the Age of 60 years or more may open the account.
  2. An individual of the age of 55 years or more but less than 60 years who has retired on superannuation or under VRS can also open account subject to the condition that the account is opened within one month of receipt of retirement benefits and amount should not exceed the amount of retirement benefits.
  3. Maturity period is 5 years.
  4. A depositor may operate more than one account in individual capacity or jointly with spouse (husband/wife). 
  5. Account can be opened by cash for the amount below INR 1 lakh and for INR 1 Lakh and above by cheque only.
  6. In case of cheque, the date of realization of cheque in Govt. account shall be date of opening of account.
  7. Nomination facility is available at the time of opening and also after opening of account.
  8. Account can be transferred from one post office to another
  9. Any number of accounts can be opened in any post office subject to maximum investment limit by adding balance in all accounts.
  10. Joint account can be opened with spouse only and first depositor in Joint account is the investor.
  11. Interest can be drawn through auto credit into savings account standing at same post office, through PDCs or Money Order.
  12. Premature closure is allowed after one year on deduction of 1.5% interest & after 2 years 1% interest (Discount means deduction from the deposit.).
  13. After maturity, the account can be extended for further three years within one year of the maturity by giving application in prescribed format. In such cases, account can be closed at any time after expiry of one year of extension without any deduction.
  14. TDS is deducted at source on interest if the interest amount is more than INR 10,000/- p.a. 
  15. Investment under this scheme qualifies for the benefit of Section 80C of the Income Tax Act, 1961 from 1.4.2007.

6. 15 year Public Provident Fund Account
Interest payable, Rates, Periodicity etc.:
From 1.4.2013, interest rates are as follows:-
8.70% per annum (compounded yearly).
  • Minimum Amount for opening of account and maximum balance that can be retained:
  • Minimum INR. 500/- Maximum INR. 1,00,000/- in a financial year.
  • Deposits can be made in lump-sum or in 12 installments.
Salient features including Tax Rebate:-
  1. An individual can open account with INR 5/- but has to deposit minimum of INR 500/- in a financial year and maximum INR 1,00,000/-
  2. Joint account cannot be opened. 
  3. Account can be opened by cash/cheque and In case of cheque, the date of realization of cheque in Govt. account shall be date of opening of account.
  4. Nomination facility is available at the time of opening and also after opening of account. Account can be transferred from one post office to another.
  5. The subscriber can open another account in the name of minors but subject to maximum investment limit by adding balance in all accounts.
  6. Maturity period is 15 years but the same can be extended within one year of maturity for further 5 years and so on.
  7. Maturity value can be retained without extension and without further deposits also.
  8. Premature closure is not allowed before 15 years.
  9. Deposits qualify for deduction from income under Sec. 80C of IT Act.
  10. Interest is completely tax-free.
  11. Withdrawal is permissible every year from 7th financial year from the year of opening account..
  12. Loan facility available from 3rd financial year.
  13. No attachment under court decree order.

Small savings schemes as above provide easy investment options with better and attractive returns for all Indian citizens through more than 1.5 lakh post offices across the country. The interest rates on all post office savings schemes, except the PPF which is a 15-year scheme, will remain fixed for the entire term of the scheme, as per the declaration by the government. While the interests accruals for the year on the PPF will depend on the interest rate for that particular year, which is currently 8.6 percent with effect from Dec 2011. 

 
 
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