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Aditya Birla Sun Life Insurance Company Limited
Aditya Birla Sun Life Insurance Company Limited
Types of post office savings schemes
There is a wide range of deposit and post office savings schemes for investors in India. A few of these include the post office savings account, Public Provident Fund, Kisan Vikas Patra, and Sukanya Samriddhi Account, to name a few.
The following discusses the various types of post office savings schemes that you can avail yourself of:
Post Office Savings Account (SB)
The Post Office Savings Account (SB) is similar to any retail bank savings account. It offers an interest rate of 4 per cent and the minimum deposit amount is ₹500, and the minimum withdrawal amount is ₹50 only. Both adults and minors can open a savings bank account. There is also a tax exemption for up to ₹10,000, and there is no maximum investment limit.
National Savings Recurring Deposit Account (RD)
The National Savings Recurring Deposit Account (RD) is one of the popular post office savings schemes that you can avail of. It has an interest rate of 5.8% per annum with a minimum monthly deposit of ₹100. There is no maximum limit for your investments, and the tenure for maturity is fixed at five years. You can also close this account prematurely by paying the amount for three years.
National Savings Time Deposit Account (TD)
The National Savings Time Deposit Account (TD) is a tenure-based fixed deposit account that requires a minimum investment of ₹1000 with no maximum limits. This post office savings scheme offers you an attractive 6.7% interest for a tenure of five years. You can also create a TD account for one year, two, and three years with an interest rate of 5.5%.
National Savings Monthly Income Account (MIS)
The National Savings Monthly Income Account (POMIS) is a post office savings scheme that pays an interest rate of 6.6%. The minimum investment limit is ₹1000. There is a maximum investment limit of ₹4.5 lakhs for individual accounts and ₹9 lakhs for joint accounts. For minors, the maximum investment limit is ₹3 lakhs. It is a go-to wealth management option for many Indians due to its centralised monitoring and safety.
Senior Citizens Savings Scheme Account (SCSS)
Senior Citizens Savings Scheme Account (SCSS) is a post office savings scheme for any individual over the age of 60. However, retired civilian employees above 55 years of age and retired defence employees above the age of 50 can also create such an account. The minimum deposit required is ₹1000 rupees, and the maximum investment limit is set at ₹15 lakhs. The interest rate is also lucrative and pegged at 7.4%.
Public Provident Fund Account (PPF)
The PPF account offers an attractive long-term investment option for Indian individual adults with a minimum deposit of ₹500. The maximum deposit is ₹1.5 lakhs per financial year. Persons of an unsound mind can also open such an account with the consent of a legal adult guardian. The interest rate for a PPF account is set at 7.1%.
Sukanya Samriddhi Account (SSA)
The Sukanya Samriddhi Account(SSA) is a special government scheme to empower girl children in India. It has an interest rate of 7.6% and requires a minimum deposit of ₹250 and a maximum investment limit of ₹1.5 lakhs in one financial year. Each family can have two such SSA accounts. In the case of twins or triplets, the family can apply for more than two such accounts. There is no limit to the number of deposits that can be made.
National Savings Certificates (VIIIth Issue) (NSC)
National Savings Certificates can be purchased at any post office for a minimum sum of ₹1000. There is no maximum limit, and it offers an attractive interest rate of 6.8% annually. It is a 5-year investment plan that can be opened by an individual or jointly. Even a minor above the age of 10 can receive an NSC in their name.
Kisan Vikas Patra(KVP)
Kisan Vikas Patra is a new scheme launched by the Government of India under which any Indian adult can open a KVP individually or jointly with a minimum balance of ₹1000. The interest rate offered is at 6.9%. This account can also be prematurely closed with no loss of benefits after 2.5 years. There is no maximum limit to the investment amount or the number of KVP accounts as well.
PM CARES for Children Scheme, 2021
If a child has lost both parents or the last surviving parent due to the COVID-19 pandemic, an account will be opened in the child’s name, and an upfront lumpsum payment will be made from the PM CARES fund. The deposit amount is ₹10 lakhs, and the beneficiary receives a monthly stipend of ₹4000 each month until the age of 18. After which, they can earn interests as per the monthly income account scheme on that ₹10 lakhs until the age of 23.
Benefits of Post Office Savings Account
There are a plethora of benefits to opening a post office savings account. A few of them have been listed below:
Post office savings schemes are highly secured since they are under the government's supervision, and the returns are fixed and guaranteed¹.
Post offices are situated almost everywhere; hence there is higher reach, even in rural locales around India.
There is a low minimum deposit that amounts to 50 rupees only, so even underprivileged people can avail of its benefits.
There are many types of savings accounts to choose from that cater to almost every kind of individual.
Most of these accounts don’t have a maturity period and can be withdrawn at any time and by anyone by producing the relevant documents and customer ID.
These accounts can be transferred from one post office to another without much hassle.
Most post office savings accounts also come with the benefit of ATM/Debit cards, so there is greater accessibility.
Even minors can create a post office savings account, but the guardian or parent would manage the funds.
A person can be nominated to whom the funds will be transferred on account of any unforeseen death of the account holder.
An individual post office savings account can be converted into a joint account and vice versa.
How to open a Post office savings account
Opening a post office savings account is simple. Visit your nearest post office and procure an account opening form of your choice. Submit the necessary documents and your account will be immediately created.
The following documents are required for opening a post office savings scheme account:
Relevant account opening form
KYC registration form
PAN card, Aadhar, Driving license, Voter id for identity verification
The amount to be deposited
Job card or Proof of Employment, where applicable
You can also open a post office savings account online. For this, follow the steps mentioned below:
Step 1: Get approval from your nearest post office for internet banking. This may take up to 24 hours.
Step 2: Visit the official Internet Banking portal of the Post Office or the IPPB app.
Step 3: Select the Savings Account of your choice on the POB Products page and click on the ‘Apply Now' button.
Step 4: Fil in all the required details such as name, date of birth, permanent address etc.
Step 5: Upload all the required documents for verification.
Step 6: Review your form and then click on ‘Submit’.
Eligibility criteria to avail post office savings scheme
The eligibility criteria for a post office savings scheme depend on the type of account created. More information about the eligibility can be found on the respective scheme pages. It is recommended you go through the official websites for the same.
The following are a few of the requirements common to most the general post office savings schemes:
Any Indian adult is allowed to start a post office savings account.
In the case of a minor, he/she must be at least 10 years old.
On behalf of a minor, a bona fide guardian may also open a post office savings account.
For joint accounts, two or three persons are allowed to open a joint post office savings scheme account.
Even if a person is not of sound mind, he/she can open a post office savings scheme account.
For non-general schemes such as the KVP accounts, the relevant eligibility may also depend on the nature of work, earnings, age, et al.
Frequently Asked Questions on Post Office Savings Scheme
The monthly income is divided equally between the joint account holders in the case of a POMIS account. This amount is fixed based on the initial investment amount and paid every month.
If the investment amount is not withdrawn after maturity from a POMIS account, the amount will remain in the account and earn a simple interest for two years. You will stop earning any interest after two years elapse.
The accumulated maturity amount can be reinvested for the POMIS post office savings scheme. However, the initial account must be closed before opening another such account. The maximum and minimum limits are also applicable in this case.
Yes, the monthly interest earned from a POMIS account can be withdrawn and deposited into an RD account. This will ensure that the interest amount earned is maximised in an easy and hassle-free manner.
Under Section 80C of the Income Tax Act, a tax exemption is provided to all investors. Some post office schemes such as SCSS, SSY, and PPF, among others, also provide additional tax rebates on the interest amount earned.
You can deposit in a post office savings account by visiting the nearest post office. Or, you can visit the online banking website of the post office (IPPB) and open a post office savings account online to make deposits online.
Currently, there is no way to open a POMIS account online. You will have to visit your nearest post office with your KYC documents and two photographs to create such an account and invest in it.
To prematurely close your post office savings scheme account, visit your nearest post office branch with the necessary account documents and file a written document detailing the closure. There is no way to prematurely close your post office savings scheme account online.
Visit the nearest post office with your account details and enquire with the postmaster about the SSA balance. Or you can also check the SSA balance online by visiting the Post Office online banking portal. Then log in to your account with the right credentials and visit the SSA tab on the screen. You have to first apply for online login credentials at the post office before availing of these online benefits.
To open a PPF account in the post office, get a PPF application form from your nearest post office and fill it out. Take your KYC documents, such as the AADHAR card and passport size photographs and submit them along with the deposit amount. Your account will be created only upon the realisation of the initial deposit.
You can open a post office PPF account online by visiting the official India Post website. From the products page, select PPF account and click on the ‘Apply Now’ button. Fill in all the required details on the application form, submit the KYC documents for verification, and click on ‘Submit’. After successful verification, make your initial deposit, and the PPF account will be created.
You can check the post office PPF balance online by visiting the official India Post website or through the India Post Mobile app. Simply enter your account details and login in. Go to the account balance section of your profile and select PPF account. The amount will be displayed on the screen.
After activating your post office internet banking services, visit the official post office website. Then click on the ‘New User Activation’ tab and fill in all the required details. Set your login authentication, such as the password, and the account will be created automatically.
Visit the online banking website of the post office (IPPB) and select RD account. Then log in with your customer ID and view the DOP products page. Enter the instalment amount and duration. Deposit the amount through online banking methods by transferring it to the IPPB account. Lastly, you will receive a confirmation after a successful transaction.
Visit your nearest post office with the relevant account documents and a valid identity card. Upon verification by a post office banking official, he/she will provide you with the RD balance directly onto your passbook.
Visit the nearest post office and acquire the NSC application form by showing your identity proofs and paying the form purchasing amount. Fill it out and submit it along with your proof of identity and other KYC documents. You can buy this NSC form with cash, cheque or a demand draft drawn in the name of the postmaster of the particular office.
¹ Provided all due premiums are paid.
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