Aug 8, 2018

Post office savings schemes still have a lot to offer

The post office pays an interest rate of 8.3% on deposits in the senior citizen savings account. Photo: Mint

Are you planning to invest? Are you worried about investments? If you are new and don’t want to take much risk, you can try traditional methods of investing. India Post office offers nine types of saving schemes. Here is a look at the various schemes offered by the post office and their prominent features.

1. Post Office Savings Account

The post office pays an interest rate of 4% per annum on deposits in its savings account which can be held individually or in joint name. A person can open a savings account with a minimum deposit of Rs 20. In case of a non-cheque facility account, the customer is required to maintain a minimum balance of Rs 50.

2. 5-Year Post Office Recurring Deposit Account (RD)

The post office pays an interest rate of 6.9% in its recurring deposit account. The interest is compounded on a quarterly basis. On maturity, a recurring deposit of Rs 10 per month fetches a return of Rs 717.43 over five years. The account can be opened against a minimum of Rs 10 per month or any amount in multiples of Rs 5.

3. Post Office Time Deposit Account (TD)

The post office offers the time deposit or fixed deposit account in four options of maturity periods: 1 year, 2 years, 3 years and 5 years. For 1 year, the interest rate is 6.6 per cent, for 2 years it is 6.7 per cent, for 3 years the interest rate is 6.9% and for 4 years it is 7.4 per cent. With just Rs 200, you can open a fixed deposit with the post office.

4. Post Office Monthly Income Scheme Account (MIS)

The post office offers an interest rate of 7.3 per cent on deposits in the monthly income scheme (MIS) account. The interest is payable on a monthly basis. The minimum investment required to set up a MIS is Rs 1,500 and the maximum investment limit is Rs 4.5 lakh in single account and Rs 9 lakh in joint account.

5. Senior Citizen Savings Scheme (SCSS)

The post office pays an interest rate of 8.3% on deposits in the senior citizen savings account. The post office permits only one deposit in this account of an amount in multiples Rs 1,000. The maximum limit should not exceed Rs 15 lakh.

6. 15 year Public Provident Fund Account (PPF)

The Public Provident Fund Account (PPF) account earns an interest rate of 7.6%. The account can be opened with an investment of a minimum of Rs 500. Deposits can be made as lump sum or in 12 installments.

7. National Savings Certificates (NSC)

The National Savings Certificate earns an interest rate of 7.6%. The interest is compounded annually and payable at maturity. Investment can be made against a minimum of Rs 100 as deposit. An amount of Rs 100 returns Rs 144.23 after the maturity period of five years in this account. These deposits qualify for tax rebate under Section 80C of the IT Act, according to India Post.

8. Kisan Vikas Patra (KVP)

The post office pays an interest rate of 7.3% on deposits in Kisan Vikas Patra (KVP). The KVP scheme requires a minimum investment of Rs 1,000 and it should be in multiples of Rs 1,000. There is no maximum limit if you want to invest in the KVP. The amount deposited in the Kisan Vikas Patra doubles in a period of 118 months.

9. Sukanya Samriddhi Accounts

A Sukanya Samriddhi scheme account will fetch you an interest rate of 8.1%. This scheme is meant for the girl child and the minimum amount required for investment is Rs 1,000. The account can be opened up to age of 10 years from the date of birth and can be closed after completion of 21 years. Deposits can be made as a lump sum.

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