Types of Post Office Saving Schemes in India

Types of Post Office Saving Schemes in India

The post office in India is a government-regulated organization with numerous employees working in different parts of the country. One outstanding feature is the provision of saving schemes for the residents. They are a government’s initiative to encourage and push members to make monthly savings out of their salaries.

This way, people can be prepared in the event of emergencies. Fortunately, some of these projects attract considerable interest in saving than what ordinary banks may give you. Additionally, users get a tax rebate, thus a high return on their money. Below are some of the schemes.

1. Post Office Recurring Deposit

It is commonly known as post office RD. This aspect’s initiative is to allow members to make monthly investments for up to five years. The benefits are a 7.3% intestate rate each year. The account under this scheme is not accessible for the stated period. Upon completion of the tenure, members are still eligible to use the account and can access the money yearly if they wish.

The fund targets small businesses and investors. They can save as little as Rs 10 each month or any other figure that is a multiple of five. In the case of business partnerships, you can open a joint account. Parents seeking to make relevant savings for their kids also have the opportunity to do the same. If you fail to make your monthly savings, you face the liability of Rs 5 as a fine.

2. Post Office Monthly Income Scheme

The post office monthly income scheme is an open account for any potential investors. You can either have a single or joint account in the case of businesses. Minors also have a platform to invest through their parents. The account has an interest rate of 7.7% p.a realized after five years.

Nevertheless, the least amount payable is 1500 Rs and a maximum of 4.5 lakh for the single account. The joint account holders have the privilege of saving up to 9 lakh every financial year. This scheme is ideal for investors with a constant flow of income. Use a calculator to calculate earnings from Post Office so that you get a more brief idea about the monthly income scheme.

3. Senior Citizens Savings Scheme

The name might sound exciting, but it explains what the scheme is all about.  It targets Indians over 60 years and not in employment. However, people who have opted for early retirement at around 55 years also have the chance to join the scheme. One condition of saving here is that your investment shouldn’t be more than what you received upon retirement. It means that each member has to give not more than 15lakh.

The amounts should come in multiples of 1000. Investors in the scheme are allowed to hold more than one account if they have other relevant partners. The interest rate here is 8.7% p.a, which you get every first day of each quarter. You have five years until your investment can mature. Upon maturity, you can either leave or request an extension. The company only allows you a maximum of three years extra.

4. National Savings Certificates

The national savings certificate is a savings scheme open for all citizens in India. It has a maturity period of five years, and an interest rate of 8% p.a. The interest gets calculated every mid-year but matures and gets released to members after the five years. One benefit of this scheme is no limitation on investment.

You can save as much as you get disposable income. Investors can only deposit money in multiples of 100, 500, 1000, and 5000. The investment under this scheme is tax-deductible according to the law. Members can also get the certificate on behalf of minors or businesses. Additionally, you can transfer the credentials from one user to another if necessary. The investment has minimal to zero risks but with a high return on investment.

5. Sukanya Samriddhi Scheme

The Sukanya Samriddhi scheme focuses on the welfare of the girl child in India. According to statistics, most investment companies do not offer tailor-made services to this gender, thus locking them out and creating a lag in the economy. This scheme’s interest rate is high, 8.5% p.a, and gets compounded after each year.

Members have to contribute at least 250 and a maximum of 150000 after every year. Upon opening the account, investors must save for 15 years, and only then can they benefit from the interests yielded. One exception that makes this scheme unique is that investments don’t get subjected to taxes upon maturity.

However, the accounts get closed once the girl child matures or loses Indian citizenship. It is a guardian’s responsibility to open the fund for their girls and follow up with the savings till completion. Failure to make the relevant contributions attract a fine of Rs 5. Also, there is a provision of premature closure when the girl attains the maturity age. Moreover, the girl can make partial withdrawals of not more than 50% of the savings.

6. Post Office Savings Account

A post office savings account is more or less similar to the version you could be having in a bank. Account-holders can have one account in each post office but also have the opportunity to transfer it to any convenient branch. The investment under this account attracts an interest rate of 4% and is fully taxable.

Just like any other account, holders can open accounts for their kids. The choice of savings scheme is entirely up to the requirements of accounts and financial capability. Nevertheless, it is a good strategy for keeping Indians on their toes by making better financial decisions.