Post Office Investments
There are a lot of investment options with Post Office of
India. Some are as listed below.
Savings Account in Post Office
The Savings account in post office fetches 4% interest with a minimum balance of Rs.5oo/. The account can be opened by any adult person either individually or joint, a gaurdian on behalf of a minor. Savings account in post office can be opened by minor more than 10 years of his age.In Savings account in post office one can have only
one account.At the time of opening the account Nomination mandatory.
account balance is Rs.500/. If the amount
of balance is less than Rs.500/, then Rs.100/ will be charged for account
maintenance in the Savings account in post office. In Savings
account in post office Interest is calculated on the basis of minimum balance
between 10th of the month and end of the month.If the balance is less than
Rs.500/ in between 10th and last day of the month no interest will be paid for
it. In Savings account in post office the interest will be paid at the
financial year. Savings account in post office is liable for Income Tax
exemption for interest earned upto Rs.10,000/ from taxable income under section
The account will be treated as
silent/dormant if the account is not operated for continuous three years in
Savings account in post office. Such accounts can revived after submitting
fresh KYC documents at concerned Savings account in post office.
Recurring Deposit Account (RD)
A) National Savings Recurring Deposit Account(RD) :-
5-Year Post Office Recurring time deposit account (RD). Interest payable, Rates, Periodicity etc. Minimum Amount for opening of account and maximum balance which will be retained From 01.04.2020, interest rates are as follows:- 5.8 % once a year (quarterly compounded) .
Minimum INR 100/- per month or any amount in multiples of INR 10/-. No maximum limit.
Salient features: Who can open:-
· An adult
· Joint Account (up to three adults) (Joint A or Joint B)
· Guardian on behalf of minor
· Guardian on behalf of person of unsound mind
· Minor above 10 years in his/her own name.
Note:- Any number of accounts are often opened.
B) Deposits :-
· Account are often opened by cash/cheque and just in case of cheque the date of deposit shall be date of clearance of cheque.
· Minimum Amount for monthly deposit is Rs. 100 and above minimum in multiple of Rs. 10.
· Subsequent deposit shall be made up to 15th day of month, if account is opened to 15th of a month.
· Subsequent deposit shall be made up to last working day of month, if account is opened between 16th day and last working day of a month.
C) Default :-
· If subsequent deposit isn’t made up to the prescribed day for a month, a default is charged for every defaulted month, default @ 1 rupee shall be charged for 100 rupee denomination account (proportionate amount for other denomination) shall be charged.
· If in any RD account, there’s monthly default, the depositor possesses to first pay the defaulted monthly deposit with default fee then pay this month deposit.
· After 4 regular defaults, the account becomes discontinued and may be revived within two months from 4th default but if the account isn’t revived within this era , no further deposit are often made in such account and account became discontinued.
· If there aren’t quite four defaults in monthly deposits, the account holder may, at his option, extend the maturity period of the account by as many months because the number of defaults and deposit the defaulted installments during the extended period.
D) Advance deposit :-
If an RD account isn’t discontinued can made advance deposit up to five years in an account.
Rebate on advance deposit of a minimum of 6 installments (inclusive of month of deposit), for Rs. 100 denomination rebate Rs. 10 for six month , Rs. 40 for 12 month
The advance deposit could also be made at the time of opening of the account or any time thereafter.
E) Loan :-
· After 12 installments deposited and account is sustained for 1 year not discontinued depositor may avail loan facility up to 50% of the balance credit within the account.
· Loan are often repaid in one lump-sum or in equal monthly installments.
· Interest on loan are going to be applicable as 2% + RD rate of interest applicable to the RD account.
· Interest are going to be calculated from date of withdrawal so far of repayment.
· Just in case loan isn’t repaid till the maturity, loan plus interest are going to be deducted from the maturity value of the RD account.
Note:- Loan are often taken by submitting application form with passbook at concerned Post Office
F) Premature Closure :-
· RD Account are often closed prematurely after 3 years from the date of account opening by submitting prescribed form at concerned Post Office.
· PO bank account rate of interest are going to be applicable if the account is closed prematurely even at some point before maturity.
· No premature closure of account shall be permissible until the amount that the advance deposits are made.
G) Maturity :-
· 5 years (60 monthly deposits) from the date of opening.
· Account are often extended for further 5 years by giving application at concerned Post Office. rate of interest applicable during extension are going to be the rate of interest at which account was originally opened.
· Extended account are often closed any time during the amount of extension. For completed years, RD rate of interest are going to be applicable and for period but a year, PO bank account rate of interest are going to be applicable.
· RD account are often retained up to five years from the date of maturity without deposit also.
H) Repayment on the death of account holder :-
· On the death of account holder nominee/claimant can submit claim at concerned Post
· Office to urge the eligible balance of such RD account.
· After sanction of claim, Nominee/legal heirs can continue RD account till maturity by submitting application at the concerned Post Office.
· National Savings Recurring time deposit account Rules 2019
· National Savings certificate of 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)
· Interest rates (New)
5 year Term Deposit
In Postal Department, there is a provision for saving an amount in 5 years Terms Deposit. This deposit gives return with an interest of 6.8% over the investment annually. As per other Banks the same investment will give 0.5% increase for senior citizens(i.e., 7.3%). This savings deposit is entitled for Income Tax deduction under 80C(80CC – 80CCD/80CCE ) up to maximum of Rs 1,50,000/- (Rs. 1.5 Lakh). This amount can be withdrawn after 2 years. NOTE: If the amount is withdrawn within 2 years, then the interest accrued over the deposit will be taxable. Hence it is recommended to keep this amount for at least 2 years. In this scheme there is a maximum limit for deposit, which is Rs.15,00,000 (Rs. 15 Lakhs).
Disclaimer: This article is posted on 19/20/2020 as per information got from post office. Please refer http://indiapost.gov.in for any changes in the above mentioned scheme/plan.