Saving Scheme in Post Office
As one of the oldest and most reputed institutions in the Republic of India, the Post Office was initially just limited to being a postal service, which mainly delivered letters. However, with each passing phase during and after the early part of Indian struggle of Independence, the Indian Post expanded its scope to further provide variety of many other services including monetary transaction.
Eventually their spectrum of service sectors now includes Finance, Pensions, and Savings. Being a Government entity the schemes under the Indian Post Office guarantees security which means they are protected by the Government itself, and hence they are very popular amongst Indian. Some post office savings plans can provide tax breaks under Section 80C of the Income Tax Act. The following is a list of such schemes, together with the appropriate rate of returns:
- Post Office Savings Account (SB)
- National Savings Recurring Deposit Account (RD)
- National Savings Time Deposit Account (TD)
- National Savings Monthly Income Account (MIS)
- Senior Citizens Savings Scheme Account (SCSS)
- Public Provident Fund Account (PPF)
- Sukanya Samriddhi Account (SSA)
- National Savings Certificates (VIIIth Issue) (NSC)
- Kisan Vikas Patra (KVP)
The rate of interests in under different saving scheme in Post office varies in the range of 4% to 7.6%, with minimum investment ranging between Rs. 50 to Rs. 1000 per financial year. While there is no maximum limit for investment in Post Office Savings Account, National Savings Recurring Deposit Account, National Savings Time Deposit Account, National Savings Certificates, Kisan Vikas Patra the upper limit ranges from Rs. 1.5 Lac to Rs. 15 Lac per annum for other schemes.
Post Office Monthly Income Scheme
The Post Office, like any state-owned banks, has long been regarded as a safe haven for saving and exchanging funds. Every Post Office around the country offer a variety of savings plans.
The Post Office Monthly Income Program is one such scheme in which you invest a particular amount and get a predetermined interest rate every month. As the name implies, you may participate in this at any post office.
Post Office Monthly Income Scheme or National Savings Monthly Income Account is a relatively low-risk investment plan that can provide recurring monthly profits to the account holders by means of interest on the investment amount. Premature accounts closure before the lock-in period is not permitted, while closures after one year may attract account closing fee or fine.
This Government backed Monthly Income Scheme is particularly popular amongst investors. Every quarter, interest rates are disclosed. The current interest rate is 6.60 percent which is payable on a monthly basis.
It provides a regular income stream on a nominal investment which is a minimum of Rs. 1000. The upper limit for investment for an individual account holder is Rs. 4.5 Lac whereas for a join account holder the amount limit is Rs. 9 Lacs.
However contrary to popular savings schemes under the Post Office the interest earned is taxable and cannot be exempted under Section 80C. Post Office Monthly Income Scheme has a five-year lock-in duration. When the plan matures, the account holder has the option of withdrawing or reinvesting the full sum.