Some of the Post Office investment schemes all should know!

Just like various investment schemes available in banks, there are several similar schemes of post office, meant for investment. Along with investment, they are also the tax saving tool!

So read about all these schemes till end:

Post office Saving Account:

  • These account can be opened by cash only.
  • Minimum amount for opening of non-cheque facility account is ₹20/-. Also minimum balance to be maintained in this account is ₹50/-.
  • Cheque facility is available when an account is opened with ₹500/-. For this minimum balance of ₹500/- is to be maintained.
  • Interest rate is 4.0% per annum on individual /joint accounts.
  • Interest earned is tax free up to ₹10000/- per year.
  • Account can be transferred from one post office to another.
  • One account can be opened in one post office.
  • Account can be opened in the name of minor. A minor after attaining majority has to apply for conversion of account in his name.
  • Joint account can be opened by two or three adults. Also a single account can be converted into joint and vice versa.
  • At least one transaction of deposit or withdrawal in three financial years is necessary to keep the account active.
  • ATM facility is available. Also deposit and withdrawals can be done through any electronic mode in CBS Post offices.

5 year Post Office Recurring Deposit Account(RD) :

  • Account can be opened by cash/cheque. The date of deposit in cheque shall be date of presentation of cheque.
  • Minimum amount for opening of account is ₹10 per month or any amount in multiple of ₹5. There is no maximum limit.
  • The interest rate from 1st January 2018 is 6.9% per annum.
  • Nomination facility is always available in this scheme.
  • Account can be transferred from one post office to other.
  • Any number of accounts can be opened in one post office.
  • Account can be opened in name of minor and after attaining majority, minor will have to apply for conversion of account.
  • Joint account can be opened by two adults. Single account can be converted into joint and vice versa.
  • Subsequent deposit can be made up to 15th day of next month if account is opened up to 15th of calender month and up to last working day of next month if account is opened between 16th day and last working day of calender month.
  • If subsequent deposit is not made up to prescribed day, then a default fee is charged for each default, default fee of ₹0.05 for every 5 rupee shall be charged. After 4 regular defaults, the account becomes discontinued and can be revived in two months. But if same is not revived with given period, then no further deposit can be made.
  • In case of default, the depositor has to first pay the defaulted monthly deposit with default fee and then pay the current month deposit.
  • There is rebate on advance deposit of at least 6 installments.
  • One withdrawal up to 50% of the balance allowed after one year.
  • Full maturity value allowed on RD accounts restricted to that of ₹50/- denomination in case of death of depositor subject to fulfillment of certain conditions.

Post Office Time Deposit Account(TD):

  • Account can be opened by individual.
  • Account can be opened by cash/cheque and in case of cheque the date of realization of cheque shall be date of opening of account.
  • Interest payable annually but calculated quarterly. The interest rates of various term plans from 1st January 2018are as follows:

1yr Account: 6.6%

2yr Account: 6.7%

3yr Account: 6.9%

4yr Account: 7.4%

  • Nomination facility is available at any time.
  • Account can be transferred from one post office to another.
  • Minimum amount for opening of account is ₹200 and in multiple thereof. There is no maximum limit.
  • Any number of accounts can be opened in any post office.
  • Account can be opened in name of minor and after attaining majority, the minor will have to apply for conversion.
  • Joint can be opened by two adults and single account can be opened into joint and vice versa.
  • When any TD account is matured, the same TD account will be renewed for period in which account was initially opened.
  • The investment under 5 years TD qualifies for the benefit under section 80C of the Income Tax Act, 1961.

Post Office Monthly Income Scheme Account(MIS) :

  • Account may be opened by individual.
  • Account can be opened by Cash/cheque. In case of cheque, the date of realization of cheque shall be date of opening of account.
  • Nomination facility is available at any time of opening of account.
  • Account can be transferred from one post office to other.
  • Any number of accounts can be opened in a post office subject to maximum investment limit by adding balance in all accounts.
  • Account can be opened in the name of minor and after attaining majority, the minor will have to apply for conversion.
  • Joint account can be opened by two or three adults and single account can be converted into joint and vice versa.
  • Maturity period is 5 years from 1st December 2011.
  • From 1st January 2018, the interest rate is 7.3% per annum payable monthly.
  • Interest can be drawn through auto credit into saving account standing at same or any other post office through PDCs or ECS.
  • Can be prematurely encashed after one year but before 3 years after deduction of 2% of deposit and after 3 years after deduction of 1% of the deposit.
  • The maximum investment limit is ₹4.5 lakh in single account and ₹9 lakh in joint account.
  • For calculation of share of an individual in joint account, each joint holder have equal share in each joint account.