InvestInn offers information about various savings and investments plans available to residents of India via.
Indian Post offices. These schemes are popular among each and every section of society as they offers higher returns without
any risk loss. i.e. Guaranteed returns.
Current Small Savings Schemes With Main Features
- Post Office Time Deposits
- Post Office Recurring Deposits
- Post Office Monthly Income Scheme [Post Office MIS]
- National Savings Certificates [NSC]
- Kisan Vikas Patra - [KVP]
- Public Provident Funds [PPF]
- Deposit Scheme for Retiring Government Employees.
- Deposit Scheme for Retiring Employees of Public Sector Companies.
- Postal Life Insurance
1. Time Deposit
Post office Time deposit scheme is a type of fixed deposit account offered by Department of post, Government of India at
all post office. This saving plan is best for those investors who want to deposit a lump sum for a fixed period. Investor
gets a lump sum (principal + interest) at the maturity of the deposit, where rate of interest on investment depend on the
term of deposit. Time Deposits can be made for the periods of 1 year, 2 years, 3 years and 5 years. Time deposit account
for 1 year carries interest of 7.25%, a 2 year account offers 7.5%, 3 year account being 8% and a 5 year account carrying
a rate of 8.5%.
The interest on the deposit is eligible for deduction u/s80L up to 12,000
2. Recurring Deposit
Accounts (RD)
Recurring deposit account is a systematic way of saving money. The scheme is meant for those investors who want to deposit
a fixed amount regularly on monthly basis in order to get a tidy sum after 5 years on the maturity of the account. Period
of maturity of account is 5 years. Sixty equal monthly deposits shall be made in an account in multiples of Rs. five subject
to a minimum of ten rupees. recurring deposit offers a higher interest rate of 7.5% per annum.
3. Monthly Income Scheme (MIS)
Post Office Monthly Income Account is meant for those investors who want to invest a lump sum and earn interest on monthly
basis for their livelihood. The scheme is, therefore, a boon for retired persons.Period of maturity of an account is six years,
bonus equal to ten per cent of deposits shall be paid alongwith principle amount. Income tax relief is available on the interest
earned.Interest is 8 per cent/ per annum, payable monthly in respect of the accounts opened on or after the 1st March,
2003.
4. National Saving Certificate (NSC)
Get fixed amount on maturity on the initial deposit after few years. NSC is a time-tested
tax saving instrument that combines adequate returns with high safety. Period of maturity of a certificate is six Years. Certificates
are available in denominations (face value) of Rs. 100, Rs. 500, Rs. 1000, Rs. 5000 & Rs. 10,000. Maturity value a certificate
of Rs. 100 denomination is Rs. 160.10.
Income Tax rebate is available on the amount invested and interest accruing every year under Section 88 of Income tax Act,
as amended from time to time.
5. Kisan Vikas Patra (KVP)
The KVPs are measured as the most safe investment tool, as it has the backing of the Government of India. The principal
is assured (guaranteed) and it is deemed to be a safe avenue for investing your money. It is a saving instrument that provides
interest income similar to bonds. KVP is suitable for an increase in investment as it accumulates money at a fixed rate, and Amount
invested in Kisan Vikas Patra doubles on maturity after 8 years & 7 months. Certificates are available in denominations
(face value) of Rs. 100, Rs. 500, Rs. 1000, Rs. 5000, Rs. 10,000 & Rs. 50,000. There is no maximum limit for purchase.
No income tax benefit is available under the scheme. However the deposits are exempt from Tax Deduction at Source (TDS)
at the time of withdrawal.
6. Public Provident Funds (PPF)
PPF, is a savings cum tax saving instrument. It also serves as a retirement planning tool for
many of those who do not have any structured pension plan covering them. Minimum deposit required is Rs. 500 and maximum deposit
limit is Rs. 70,000 in a financial year. The account matures for closure after 15 years
Income Tax rebate is available ‘on the deposits made’, under Section 88 of Income tax Act, as amended from
time to time.
