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POST OFFICE SCHEMES


Indian Post offers several Savings Schemes which are:

  • backed by the Government of India
  • safe, secure and risk-free investment options
  • not deducting any Tax at Source ( NO TDS)
  • providing nomination facility
  • transferable to any Post Office anywhere in India
  • offering attractive rates of interest.

TYPES OF POST OFFICE SCHEMES



Following are schemes offered by post office:

(1) Recurring Deposit Account (RDA):

  • Amount of Investments: min - Rs. 10 p.m. or any amount in multiples of Rs. 5
  • Amount of Investments: max - No maximum limit
  • Payment Terms:The deposit shall be paid as monthly installments
  • Maturity Terms: One withdrawal is allowed after one year of opening a post-office RDA or You can withdraw up to half the balance lying to your credit at an interest charged at 15%
  • Returns: The PO RD offer a fixed rate of interest, currently at 8 %pa compounded qtr.
  • Tax Considerations: Interest is liable to tax however there is No TDS from interest


(2) Post Office Monthly Income Scheme (MIS):

  • Feature: MIS provides a source of regular income on a long term basis
  • Amount of Investments: Rs 10,000/- and above
  • Returns : The post-office MIS gives a return of 8% plus a bonus of 10 per cent on maturity.
  • Maturity : The duration of MIS is six years. However, premature closure of the account is permitted any time after the expiry of a period of one year of opening the account.
  • Tax Considerations: Interest is liable to tax however there is No TDS from interest
  • Other considerations: Only one deposit is permitted and Only individuals can open the account


(3) Time Deposit:

  • Features : Time Deposit is a banking service similar to a Bank Fixed Deposit offered by Department of post, Government of India at all post office counters in the country. This scheme is meant for those investors who want to deposit a lump sum of money for a fixed period.
  • Amount of Investment: minimum- Rs 200; maximum- no limit
  • Maturity: Time Deposits can be made for the period of 1 year, 2 years, 3 years and 5 years.
  • Returns: This investment option pays annual interest rates between 6.25 and 7.5 per cent, compounded quarterly.
  • Tax Considerations: Interest is liable to tax however there is No TDS from interest
(4) Senior Citizen Scheme:

  • Features: "Senior Citizens Savings Scheme" is launched for Citizens of 60 years of age and above. Citizens who have retired under a voluntary or a special voluntary retirement scheme and have attained the age of 55 years are also eligible, subject to specified conditions
  • Maturity: Maturity period of the deposit will be five years, extendable by another three years.
  • Returns: The deposit will carry an interest of 9% per annum
  • Tax Considerations: Interest is liable to tax however there is No TDS from interest


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