Post Office Saving Schemes – Overview, Plans & Benefits

It has been agreed by the government that all interest rates on small investment schemes and post office schemes will be held unchanged throughout the July-September portion of the 2020-21 fiscal year. This was stated in a circular letter that was published by the Department of Posts on 1 July 2020. Saving for the future is of utmost importance. As a result, it ensures that you will have a safe and secure future for your children. When it comes to saving plans, there are a number of options that are available to you, and in this article, we are going to give you an idea of what Post Office Schemes can offer you.

Under the Indian Post Office Saving Schemes, there are a number of plans that are available to investors that offer a risk-free way to benefit from their investments. These schemes run in 1.54 lakh post offices in India.

Different Post Office Saving Schemes

1. Post Office Savings Account
2. 5-Year Post Office Recurring Deposit Account (RD)
3. Post Office Time Deposit Account (TD)
4. Post Office Monthly Income Scheme Account (MIS)
5. Senior Citizen Savings Scheme (SCSS)
6. 15 years Public Provident Fund Account (PPF)
7. National Savings Certificates (NSC)
8. Kisan Vikas Patra (KVP)
9. Sukanya Samriddhi Accounts (SSA)

Here is a brief overview of the different post office investment and post office interest rates:

Scheme	Interest Rate	Minimum Investment	Maximum Investment	Eligibility	Tax Implications
Post Office Savings Account	4% per annum	One can start from as low as  ₹ 20	No limit	The applicant must be a resident Indian, Minor or Major	One can claim the tax benefit of up to ₹ 50,000 from the financial year 2018-19
		Non-Cheque Facility ₹ 50
Post Office Time Deposit Account (TD)	1st Year– 6.9% p.a.	One can start with as low as ₹ 200	No limit	Individual	As per Section 80C, one gets the tax benefit up to 5 years on  deposits
	2nd Year -6.9% p.a.
	3rd Year– 6.9% p.a.
	4th Year – 7.7% p.a.
Post Office Monthly Income Scheme Account (MIS)	7.6 % per annum (one can pay monthly)	One can start with as low as ₹ 1500	In the case of one account holder, ₹ 4.5 lakhs and 9 lakhs for joint holders.	Individual	The interest earned is taxable and no deduction under Sec 80C for Deposits made
Senior Citizen Savings Scheme (SCSS)	8.6 % per annum and it is compounded annually	One can start with as low as ₹ 1000	Maximum deposit ₹ 15 Lakh	Any individual who is above the age of 60 years or individuals who are above 55 years and have taken the VRS or Superannuation	Depositor gets tax benefit under 80C
					If the interest earned is more than ₹ 50,000 (p.a.), TDS is deducted on the same
15 year Public Provident Fund Account (PPF)	7.9 % per annum and it is compounded annually	₹ 500 per financial year	₹ 1.5 Lakh per financial year	Individual	Tax rebate under section 80C for deposits (maximum ₹ 1.5 Lakh pa)
National Savings Certificates (NSC)	7.9 % per annum and it is compounded annually	₹ 100	No Limit	Individual	The depositor gets the tax rebate under Section 80C for deposits (maximum ₹ 1.5 Lakh p.a.)
Kisan Vikas Patra (KVP)	7.6 % per annum and it is compounded annually	₹ 1,000	No limit	Individual (Adult)	Interest is taxable but when the depositor gets the amount on maturity, then there it is non-taxable
Sukanya Samriddhi Accounts	8.4 % per annum and it is compounded annually	Rs 1000 per financial year	Rs 1.5 Lakh per financial year	Girl Child – up to 10 years from birth and 1 additional year of grace	Investment (up to Rs 1.5 Lakh exempt under Section 80C), interest and amount received on maturity is tax-free

 

Advantages of the Postal Saving Schemes

If you have planned to go ahead with the Post Office saving scheme, then you will get several advantages. Some of those are enumerated below:

• Easy investment– One of the reasons why you should be going ahead with the post office saving scheme is that one can easily enrol for the same. Moreover, it is a risk-free return, so you don’t really have to worry about your money.
• Long–term investment gain– Some of the post office saving plans extend for a period of 15 years, which makes it easy for the people who are retiring to get the benefit.
• Tax exemption- Another advantage of the post office saving scheme is that you will get tax exemption under Section 80C for the deposit amount. The interest earned on some new Post Office schemes, like Sukanya Samriddhi Yojana, are also exempted from tax.
• A wide array of options- Apart from the tax benefit and interest earned, the post office schemes also have offered a wide spectrum of schemes which you can choose as per the budget and investment requirement.

Conclusion

The details of the post office scheme in Hindi are available on the Internet in order to provide customers with a complete understanding of the different schemes. By taking advantage of these schemes, you will be able to enjoy a safe and secure future.

 

FAQ’s

1. Is post office savings tax-free?

Interest income earned from savings accounts, under Section 80TTA, including the Post Office Savings Account, up to ₹10,000 is tax-deductible from the gross income. However, for senior citizens, no deduction under Section 80TTA is allowed.

2. How much money can be deposited in the post office?

Single account holders can deposit a maximum of ₹1 lakh while joint account holders can deposit a maximum of ₹2 lakhs.

3. Is there a maturity period?

No, one of the main features of a Post Office savings account is that there is no lock-in or maturity period.