Post Office Saving Scheme

Post Office Small Savings Schemes are very popular in India as people prefer Investing money in instruments backed by the Government of India. These are the schemes that aim at providing secure investments with guaranteed returns. 

Post Office Saving Account

Interest Rate  : 4.00%

5 Yr Post Office Recurring Deposit (RD)

Interest Rate :  5.80%

Post Office Time Deposit (TD)

Interest Rate : 5.50%

Monthly Income Scheme (MIS)

Interest Rate : 6.60%

Senior Citizen's Saving Scheme (SCSS)

Interest Rate : 7.40%

Kisan Vikas Patra (KVP)

Interest Rate : 6.90%

Public Provident Fund (PPF)

Interest Rate :  7.10%

National Saving Scheme (NSC)

Interest Rate :  6.80%

Sukanya Samriddhi Yojana (SSY)

Interest Rate :  7.60%

5 Year Post Office Recurring Deposit

From 01.04.2020, interest rates are as follows:-

  • 5.8​ % per annum (quarterly compounded)

 

Who can open
  • (i) a single adult
    (ii) Joint Account (up to 3 adults) (Joint A or Joint B)
    (iii) a guardian on behalf of minor
    (iv) a guardian on behalf of person of unsound mind
    (iv) a minor above 10 years in his own name.
  • Note:- Any number of accounts can be opened.
Deposit
  • (i) Account can be opened by cash/cheque and in case of cheque the date of deposit shall be date of clearance of cheque.
    (ii) Minimum Amount for monthly deposit is Rs. 100 and above minimum in multiple of Rs. 10.
    (iii) Subsequent deposit shall be made up to 15th day of month, if account is opened up to 15th of a calendar month.
    (iv) 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 calendar month.
Default
  • (i) If subsequent deposit is not made up to the prescribed day for a month, a default is charged for each defaulted month, default @ 1 rupee shall be charged for 100 rupee denomination account (proportionate amount for other denomination) shall be charged.
    (ii) If in any RD account, there is monthly default, the depositor has to first pay the defaulted monthly deposit with default fee and then pay the current month deposit.
    (ii) After 4 regular defaults, the account becomes discontinued and can be revived within two months from 4th default but if the account is not revived within this period, no further deposit can be made in such account and account became discontinued.
    (iii) If there are not more than four defaults in monthly deposits, the account holder may, at his option, extend the maturity period of the account by as many months as the number of defaults and deposit the defaulted installments during the extended period.
Advance Deposit
  • (i) If an RD account is not discontinued can made advance deposit up to 5 years in an account.
    (ii) Rebate on advance deposit of at least 6 installments (inclusive of month of deposit), for Rs. 100 denomination rebate Rs. 10 for 6 month , Rs. 40 for 12 month
    (iii) The advance deposit may be made at the time of opening of the account or any time thereafter.
Loan
  • (i) After 12 installments deposited and account is continued for 1 year not discontinued depositor may avail loan facility up to 50% of the balance credit in the account.
    (ii) Loan can be repaid in one lump-sum or in equal monthly installments.
    (iii) Interest on loan will be applicable as 2% + RD interest rate applicable to the RD account.
    (iv) Interest will be calculated from date of withdrawal to date of repayment.
    (v) In case loan is not repaid till the maturity, loan plus interest will be deducted from the maturity value of the RD account.
  • Note:- Loan can be taken by submitting loan application form with passbook at concerned Post Office (PDF form)
Premature Closure
  • (i) RD Account can be closed prematurely after 3 years from the date of account opening by submitting prescribed application form at concerned Post Office. (PDF form)
    (ii) PO Savings Account interest rate will be applicable if the account is closed prematurely even one day before maturity.
    (iii) No premature closure of account shall be permissible until the period for which the advance deposits have been made.
Repayment on the death of account Holder
    • (i) On the death of account holder nominee/claimant can submit claim at concerned Post Office to get the eligible balance of such RD account.(Claim Form PDF)
      (ii) After sanction of claim, Nominee/legal heirs can continue RD account till maturity by submitting application at the concerned Post Office.
    • ​Note:- National Savings Recurring Deposit Account Rules 2019 (pdf)

rucurring deposit
time deposit

Post Office Time Deposit Account  (TD)

Currently, the Interest Rate for Time Deposit stands at 5.5% p.a. The investment under 5 years TD qualifies for the Tax benefit under Section 80C of the IT Act, 1961.

Deposits

(i) Account type for 1 year, 2 year, 3 year, 5 year.
(ii) Account can be opened with minimum of Rs. 1000 and in multiple of Rs. 100. No maximum limit for investment.
(iii) Interest shall be payable annually, No additional interest shall be payable on the amount of interest that has become due for payment but not withdrawn by the account holder.
(iv)The annual interest may be credited to the savings account of the account holder by submitting application.
(v) The investment under 5 year TD qualifies for the benefit of section 80C of Income Tax Act, 1961.

Who Can Invest ?

(i) a single adult
(ii) Joint Account (up to 3 adults) (Joint A or Joint B)
(iii) a guardian on behalf of minor
(iv)a guardian on behalf of person of unsound mind
(v) a minor above 10 years in his own name.

Maturity

(i)  Deposit amount shall be repayable after expiry of 1 year, 2 year, 3 year, 5 year (as the case may be) from the date of opening.

Interest

(i) Interest shall be payable on completion of a month from the date of opening and so on till maturity.
(ii) If the interest payable every month is not claimed by the account holder such interest shall not earn any additional interest.
(iii) In case any excess deposit made by the depositor, the excess deposit will be refunded back and only PO Savings Account interest will be applicable from the date of opening of account to the date of refund.
(iv) Interest can be drawn through auto credit into savings account standing at same post office, or ECS. In case of MIS account at CBS Post offices, monthly interest can be credited into savings account standing at any CBS Post Offices.
(v) Interest is taxable in the hand of depositor.

Premature Closure of Account

(i) No deposit shall be withdrawn before the expiry of 1 year from the date of deposit.
(ii) If account is closed after 1 year and before 3 year from the date of account opening, a deduction equal to 2% from the principal will be deducted and remaining amount will be paid.
(iii) If account closed after 3 year and before 5 year from the date of account opening, a deduction equal to 1% from the principal will be deducted and remaining amount will be paid.
(iv) Account can be prematurely closed by submitting prescribed application form with pass book at concerned Post Office. ​

Senior Citizens Saving Scheme (SCSS)

Rate of interest 7.4​​% Per Annum (with effect from  01-04-2020 )

Who can open account

(i) An individual above 60 years of age.
(ii) Retired Civilian Employees above 55 years of age and below 60 years of age, subject to condition that investment to be made within 1 month of receipt of retirement benefits.
(iii) Retired Defense Employees above 50 years of age and below 60 years of age, subject to condition that investment to be made within 1 month of receipt of retirement benefits.
(iv) Account can be opened as individual capacity or jointly with spouse only.
(v) The whole amount of deposit in a joint account shall be attributable to the first account holder only.

Deposit

(i) Minimum deposit shall be Rs. 1000 and in multiple of 1000, subject to maximum limit up to Rs. 15 lakh in all SCSS accounts opened by an individual.
(ii) In case any excess deposit made in SCSS account, excess amount will be refunded immediately to the depositor and only PO Savings Account Interest rate will be applicable from the date of excess deposit to the date of refund.
(iii) Investment under this scheme qualifies for the benefit of section 80C of Income Tax Act, 1961.

Interest

(i) Interest shall be payable on quarterly basis and applicable from the date of deposit to 31st March/30th June/30th September/31st December.
(ii) If the interest payable every quarter is not claimed by an account holder, such interest shall not earn additional interest.
(iii) Interest can be drawn through auto credit into savings account standing at same post office, or ECS. In case of SCSS account at CBS Post offices, monthly interest can be credited into savings account standing at any CBS Post Offices.
(iv) Interest is taxable if total interest in all SCSS accounts exceeds Rs.50,000/- in a financial year and TDS at the prescribed rate shall be deducted from the total interest paid. No TDS will be deducted if form 15 G/15H is submitted and accrued interest is not above prescribed limit.

Account Closure on Maturity

(i) Account may be closed after 5 year from the date of opening by submitting prescribed application form with passbook at concerned Post Office.
(ii) In case of death of account holder, from the date of death, account shall earn interest at the rate of PO Savings Account.
(iii) In case spouse is a joint holder or a sole nominee, account can be continued till maturity if spouse is eligible to open SCSS account and not have another SCSS Account.

Premature Closure

(i) Account can be prematurely closed any time after date of opening.
(ii) If account closed before 1 year, no interest will be payable and if any interest paid in account shall be recovered from principle.
(iii) If account closed after 1 year but before 2 year from the date of opening, an amount equal to 1.5 % will be deducted from principal amount.
(iv) If account closed after 2 year but before 5 year from the date of opening, an amount equal to 1 % will be deducted from principal amount.
(v) Extended account can be closed after the expiry of one year from the date of extension of the account without any deduction.

Extension of Account

(i) Account holder may extend the account for further period for 3 years from the date of maturity by submitting prescribed form with passbook at concerned post office.
(ii) Account can be extended within 1 year of maturity.
(iii) Extended account shall earn interest at the rate applicable on the date of maturity.

senior citizen

Post Office Monthly Income Scheme  (MIS)

Currently, the Interest Rate for MIS stands at 6.6% p.a.

Deposits

From 01.04​.2020, interest rates are as follows:-
6​.6​ % per annum payable monthly.

Minimum Amount for opening of account and maximum balance that can be retained

  • In multiples of INR 1000/-
  • Maximum investment limit is INR 4.5 lakh in single account and INR 9 lakh in joint account
  • An individual can invest maximum INR 4.5 lakh in MIS (including his share in joint accounts)
  • For calculation of share of an individual in joint account, each joint holder have equal share in each joint account.
Who Can Invest ?
  • (i) a single adult
    (ii) Joint Account (up to 3 adults) (Joint A or Joint B)
    (iii) a guardian on behalf of minor
    (iv)a guardian on behalf of person of unsound mind
    (v) a minor above 10 years in his own name.
Maturity

(i)  Account may be closed on expiry of 5 years from the date of opening by submitting prescribed application form with pass book at concerned Post Office.

(ii) In case the account holder dies before the maturity, the account may be closed and amount will be refunded to nominee/legal heirs. Interest will be paid up to the preceding month, in which refund is made.

Interest

(i) Interest shall be payable on completion of a month from the date of opening and so on till maturity.

(ii) If the interest payable every month is not claimed by the account holder such interest shall not earn any additional interest.

(iii) In case any excess deposit made by the depositor, the excess deposit will be refunded back and only PO Savings Account interest will be applicable from the date of opening of account to the date of refund.

(iv) Interest can be drawn through auto credit into savings account standing at same post office, or ECS. In case of MIS account at CBS Post offices, monthly interest can be credited into savings account standing at any CBS Post Offices.

(v) Interest is taxable in the hand of depositor.

Sukanya Samriddhi Account

Rate of interest 7.6​​% Per Annum (with effect from  01-04-2020 ), calculated on yearly basis ,Yearly compounded

Who can open account
  • -> By the guardian in the name of girl child below the age of 10 years.
  • -> Only one account can be opened in India either in Post Office or in any bank in the name of a girl child.
  • -> This account can be opened for maximum of two girls in a family. Provided in case of twins/triplets girls birth more than two accounts can be opened.
Deposit
  • (i) Account can be opened with minimum initial deposit Rs. 250.
    (ii) Minimum deposit in a FY is Rs. 250 and maximum deposit can be made up to Rs. 1.50 lakh (in multiple of Rs.50) in a FY in lumpsum or in multiple installments.
    (iii) Deposit can be made maximum up to completion of 15 years from the date of opening.
    (iv) If minimum deposit Rs. 250 is not deposited in a account in a FY , the account shall be treated at defaulted account.
    (v) Defaulted account can be revived before completion of 15 years from the date of opening of account by paying minimum Rs. 250 + Rs. 50 default for each defaulted year.
    (vi) Deposits qualify for deduction under section 80C of Income Tax Act.
Interest
  • (i) The account will earn on the prescribed rate notified by Ministry of Finance on quarterly basis.
    (ii) The interest shall be calculated for the calendar month on the lowest balance in the account between the close of the fifth day and the end of the month.
    (iii) Interest shall be credited to the account at the end of each Financial year.
    (iii) Interest shall be credited to the account at the end of each FY where account stands at the end of FY. (i.e. in case of transfer of account from Bank to PO or vice versa)
    (iv) Interest earned is tax free under Income Tax Act.
suknya samrudhi

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