Post Office Saving Schemes Interest Rates

It has been over 150 years to Department of Posts in India.

It is regarded as one of the primary channels of India’s communication structure.

The Department of Posts in India operates through 1,55,015 post offices making it one of the biggest postal network in the entire world.

It has gone on to make people’s life easy by delivering mails, providing the opportunity to invest in Small Savings Schemes, and life insurance cover, etc.

One of the main aspects of Indian Post Office is the varied Savings Schemes offered by them that make it possible for people to save and invest their hard earned money.

Some of the major Savings Schemes offered by Indian Post Office, include PO Savings Account, PO Time Deposit Account, PO Recurring Deposit Account, Senior Citizens Savings Scheme, PO Monthly Income Scheme, National Savings Certificate, Kisan Vikas Patra, Sukanya Samriddhi Accounts, etc.

Herein, we have come up with a presentation showcasing Post Office Saving Schemes Interest Rates. So, if you want to invest in Post Office Saving Schemes, it is beneficial for you to know the interest rates that are applicable so that you can make the correct decision at the right time. We have also listed the essential features of Post Office Savings Schemes.

Post Office Saving Schemes Interest Rates

So, let’s begin and see the interest rates on Post Office Saving Schemes.

Contents

Post Office Savings Account

The Post Office Savings Account can be opened by cash only.
Minimum INR 20.00 is required to open a PO Savings Account.
The Minimum balance required to be maintained INR 50.00 in a non-cheque facility account.
Cheque facility is available for an account opened with INR 500.00 and the minimum balance required to be maintained in such accounts is INR 500.00.
Nomination can be done at the time of opening the account and also after opening an account.
Post Office Savings Account can be opened in the name of the minor.
There is a facility to open Joint Account by two or three adults.
Interest earned is Tax-Free up to INR 10,000.00 per year.
Interest payable is 4.0% per annum on an individual or joint accounts.

Post Office Time Deposit Account

The Time Deposit Account can be opened by an Individual.
The account can be opened for five years.
An individual can open any number of Time Deposit Accounts in any post office.
Joint accounts can be opened by two adults.
Minors of 10 years or above can open and operate time deposit account.
Time Deposit account can be opened by both cash and cheque.
Nomination facility is provided at the time of opening the account and also after the opening of the account.
The minimum amount for opening time deposit account is INR 200.00. There is no limit on the maximum amount.
Tax deductions can be taken under Section 80C of the IT Act of India, 1961 for investment under 5 years in Time Deposit Account.
Time Deposit Account can be ported to other post offices.
On maturity, the Time Deposit Account is automatically renewed for the period it was initially opened.
NRIs cannot invest in Time Deposit Schemes.

Interest Rate Details (applicable from 01.04.2017)

1-year Account – 6.9%
2-year Account – 7.0%
3-year Account – 7.2%
5-year Account – 7.7%

Post Office Monthly Income Scheme Account (POMIS)

Post Office Monthly Income Scheme is an investment scheme offered by Indian postal service. It provides guaranteed returns at 7.5% per annum in the form of fixed monthly income. The maturity term for POMIS is five years.

The Monthly Income Scheme has three merits:

It keeps your capital intact.
It provides better returns than debt instruments.
Assures a fixed monthly income.

POMIS is being administered by Ministry of Finance, Government of India. So, it offers far greater credibility than any other investment option.

Ideally, one should go for withdrawing the amount invested after 5 years. However, if you do withdraw the money before 5 years, this is what happens:

If you withdraw the deposit before 1 year – you get nothing
If you withdraw your deposit in 1 to 3 years – You get your deposit back with a nominal deduction of 2% as penalty
If you withdraw your deposit after 3 years – You get your deposit back with a nominal deduction of 1% as a penalty.

Salient Features

A POMIS Account can be opened by the individual.
The Account can be opened by both cash and cheque.
Nomination facility is provided at the time of opening the account and also after the opening of the account.
The Monthly Income Scheme account can be ported easily from one post office to other.
One can open any number of accounts at any post office. However, it is subjected to maximum investment limit that is calculated by adding balance in all accounts.
A minor 10 years and above can open and can operate the account.
A joint account can also be opened by two or three adults.
Maturity period is 5 years.
The interest rate is 7.5% per annum payable monthly.
Minimum amount required to open the account is multiples of INR 1500.00
Maximum Investment limit in a single account is INR 4.5 lakh.
For Joint Account, the maximum investment limit is INR 9 lakh.

5-Year Post Office Recurring Deposit Account (RD)

You can open any number of RD Accounts in any post office.
RD Account can be opened by both cash as well as a cheque.
Nomination facility is provided during the opening of the account and also after the opening of the account.
RD Account can be ported from one post office to another.
Joint RD account can also be opened.
You can make a subsequent deposit up to the 15th day of next month if the RD Account is opened up to 15th of a given calendar month. However, if the RD account is opened between the 16th day and last working day of a calendar month, then the subsequent deposit can be made up to the last working day of the next month.
A default fee @0.05 for every 5 rupees is charged if you fail to make a subsequent deposit up to the prescribed day. In case there are 4 regular defaults, the account becomes discontinued. However, it can be revived in two months, failing which no further deposit can be made.
One withdrawal is allowed after one year which can be up to 50% of the balance held in RD Account.
The interest rate is 7.1% per annum compounded annually.
The minimum amount required to open RD Account is INR 10/- per month or any amount in multiples of INR 5/-.
There is no maximum limit.

Senior Citizen Savings Scheme (SCSS)

An individual having the age of 60 years or more may open the account.
An individual who has retired on superannuation or under VRS can also open an account. He or she should be of the age of 55 years or more but less than 60 years. The account has to be opened within one month of receiving retirement benefits.
Maturity period is 5 years.
For opening the account by cash, the amount has to be below INR 1 lakh. Account for INR 1 Lakh and above is opened through cheque payment only.
Premature closure is allowed subject to deduction of 1.5% on deposit after one year and deduction of 1% on the deposit after two years.
TDS is deducted at source on interest if the interest earned is more than INR 10,000/- per annum.
Interest rate is 8.3% per annum
One can only make one deposit in the account in multiple of INR 1000/- subject to a maximum limit of Rs. 15 Lakh.

National Savings Certificates (NSC)

National Savings Certificates (NSC) is available in denominations of INR 100.00, 500.00, 1000.00, 5000.00 and 10,000.00. No maximum limit. Interest rate of 7.8% compounded annually but payable at maturity. Deposits made for NSC qualify for tax rebate under Section 80C of Income Tax Act, 1961.

Kisan Vikas Patra (KVP)

Kisan Vikas Patra (KVP) Certificate can be purchased by an adult for himself or by two adults or on behalf of a minor.
Facility of nomination is available.
It can be purchased from any Departmental Post Office.
It can be transferred from one person to another.
KVP Certificate can be ported from one post office to other.
It can be encashed after 2 and ½ years from the date of issue.
Investment done under KVP scheme qualifies for tax rebate under Section 80C of IT Act, 1961.
Available in denominations of INR 1000, 5000, 10,000, and 50,000.
Minimum deposit is INR 1000.
No Maximum Limit.
The amount invested is doubled in 115 months.
It is a post office scheme to double your money.

Sukanya Samriddhi Accounts

Sukanya Samriddhi Account can be opened in the name of Girl Child by the legal or natural guardian.
Only one account is allowed to be opened in the name of a girl child and up to a maximum of two accounts in the name of two different girl children.
The account can be opened up to the age of ten years from the date of birth of the girl child.
The account will be discontinued if a minimum of Rs. 1000/- is not deposited in a financial year. It can be revived by paying the minimum amount required to be deposited for the year together with a penalty of Rs. 50/-.
Partial withdrawals are allowed once account holder attains the age of 18 years.
There is the option to close the account after completion of 21 years.
Premature closure is allowed subject to the condition that girl is married and has completed 18 years of age.
Minimum amount required for the opening of account is INR 1000/-
Maximum amount INR 150000/- in a financial year.
The rate of Interest 8.3% p.a. Compounded yearly.

So, we see that the Postal Department offers various Post Office saving schemes for the people of India. These saving schemes are a viable and safe way to go ahead with investing your hard earned money and plan a better tomorrow for yourself and your family.