Postal Office Savings Schemes
National Savings Certificate (NSC)
- Tax Rebate U/S. 80C of I.T. Act
- Interest earned eligible for sec. 80C benefit in first 5 years
- 8.00% p.a. compounded half yearly payable on maturity
- Rs. 10,000/- becomes Rs. 16,010/- on maturity
- Minimum Rs. 1000/- & no maximum limit
- Tenure 6 years
- No TDS
- KYC of all applicants for any value compulsory
Kisan Vikas Patra (KVP)
- Double your Money in 8 years & 7 months
- Min. Rs. 1000/- & No Max. limit
- Early Redemption facility after 2½ years
- IRR : 8.40%
- No TDS
- KYC of all applicants for any value compulsory
As per circular of the CBDT No. 687 dated Aug. 19, 1994 interest on KVP is to be assessed on accrual basis
Monthly Income Scheme (MIS)
- 8.00% p.a. payable monthly
- 5% bonus of principle on maturity
- Tenure 6 years
- Minor cannot invest
- Min. amount Rs. 25000/- & in multiples to get interest amount in rupees & no decimal
- Max. amount Rs. 4.50 lakhs (Singly) & Rs. 9.00 lakhs (Jointly)
- Premature encashment facility after 1 year Penalty of 2% (1-3 yrs) and 1% (after 3 yrs)
- ECS facility
- No TDS
- KYC of all applicants for any value compulsory
ECS Facility: If the PO-MIS a/c is opened in the names of A & B as Joint a/c, then the ECS facility can be availed if the bank a/c has both the persons as joint holders, sequence does not matter. Thus if MIS a/c is in A & B’s name, then Bank a/c can be in A&B or B&A sequence. ECS won’t be allowed if the bank a/c has ‘A’ or ‘B’ as single holder. It is ok, if the sequence is ‘A, B & C’
Time Deposit (TD)
- Interest exempt from wealth tax.
- No TDS
- Min. Invt.: Rs.5,000/-. No Max. limit
- Interest compounded quarterly & payable yearly
- Account can be opened by individuals only
| Period | ROI % |
| 1 year | 6.25% |
| 2 year | 6.50% |
| 3 year | 7.25% |
| 5 year | 7.50% |
Repurchase Terms:
- Account can be closed after six months but before one year without interest
- 2, 3 & 5 year Accounts can be closed after one year at 2% discount
Recurring Deposit (RD)
Every year you save money & invest it. The most disheartening thing is that you invest every year at lower interest rates as compared to the previous year. How about an option that protects you from falling Interest rates & ensures your next 5 years savings to be invested every year at 7.50%. Yes, Recurring Deposits of Post office offers you much higher returns at 7.50% p.a. compared to Bank RDs which offer paltry 5.50%. So, if you decide your per month investment amt. of may be Rs. 1,000/- or Rs.5,000 or Rs.10,000 or more, you ensure for yourself 7.50% returns on your next 5 yrs savings too.
| Term | Mode of Payment | Min. Amt. to be invested | Maturity Amount | IRR% |
|---|---|---|---|---|
| 5 yrs | Monthly | 1,000 | Rs. 72,890 | 7.45% |
| Half Yearly | 5,900 | 7.62% | ||
| Yearly | 11,600 | 7.72% |
- Interest exempt from wealth tax. No TDS
- Accounts in the name of minors can be opened through guardians
- Any number of accounts can be opened
- One withdrawal upto 50% of the balance allowed after one year
Default / Revival:
- If there are more than 4 defaults in monthly deposits, the account shall be treated as discontinued. Revival of the account is permitted only within a period of 2 months from the month of fifth default. The account, in which defaulted installments are deposited along with default fee, is not treated as discontinued. Penalty: Rs. 20/- per Rs. 1000/- p.m.
- Account can be prematurely closed after 3 years from the date of opening of account and on such premature closure of the account, interest at the rate applicable from time to time on Post Office Savings Account shall be payable. However no premature closure of account is permissible until the period for which the advance deposits made is over.
Public Provident Fund (PPF)
- 8.00% Tax Free interest compounded annually
- Tenure 15 yrs
- Min. Rs. 500/- p.a.
- Max. Rs. 70,000/- p.a.
- Early withdrawal facility after 6 yrs
- After 15 yrs. account can be renewed for 5 yrs. subsequently
- Eligible u/s 80C
- Nomination facility
- KYC compulsory
Senior Citizen Savings Scheme,2004
- 9% p.a. payable quarterly.
- Eligible for individuals of 60 yrs. & above.( jointly with spouse only).
- Tenure 5 yrs.
- Early withdrawal facility after 1 yr.with penalty.
- Min. rs. 1000/- . max. rs. 15 lakhs.
- Nomination facility.
- TDS compulsory.
- KYC compulsory.
NSS 1987: 7.50% annually
Please note:
- CHEQUE PAYEE “THE POST MASTER KALBADEVI H.O.
- SIGNATURE OF FIRST HOLDER ON FRONT & BACK OF CHEQUE
- MAX. AMT. TO BE INVESTED IN CASH PER TRANSACTION IS RS. 50,000 IN NSC, KVP, MIS & T.D.
- HUF & NRI’S ARE NOT ELIGIBLE FOR POSTAL SAVING SCHEMES & PPF.
- MINORS NOT ELIGIBLE FOR MIS.
- IN NSC, KVP, PPF: IN CASE OF MINOR’S A/C NO NOMINATION & NO JOINT HOLDER.
- KYC OF ALL APPLICANTS FOR ANY VALUE COMPULSORY IN ALL POSTAL SAVING SCHEMES & PPF.
DISCLAIMER: PLEASE REFER NOTIFIED GUIDELINES, RULES, REGULATIONS, TAX IMPLICATIONS & INDIA POST SMALL SAVINGS BROCHURE CAREFULLY BEFORE INVESTING.
