What are the Different Types of Post Office Schemes?
Did you know that the Indian post office is the most extensive postal network globally, with over 1.5 lakh post offices – and with more than half of them in rural areas? Isn’t this great? Though we hardly use post anymore – do you know why the post office still holds a famous place? Did you know why this was? This is because the post office does not just serve in one way. One of the most crucial factors of the post office is – the different types of investment and savings schemes they offer. These schemes are government-organised and one of the most secure and high-return investment vehicles.
What are the Kinds of Post Office Schemes in 2022?
These are all of the significant investments by post offices, and you would want to know them:
1) The Savings Account of the Post Office
This post office savings plan is available across the country. Furthermore, the deposit amount in the post office savings account earns a predetermined interest rate. As a result – the post office saving scheme is suitable for the ones looking for a guaranteed return. You can open a savings account at the post office for as little as Rs. 20.
This post office savings initiative is viral in India’s rural areas. The federal government sets the rate of interest on post office savings accounts. The rates are frequently comparable to those of a bank’s savings account. The interest rate that is applicable on a post office savings account is roughly 4%, and the interest is computed monthly. In addition, interest earned on deposits of less than INR 50,000 per year is tax-free in the hands of the depositor.
2) The Post Office Monthly Income Scheme
The Post Office Monthly Income Scheme – it is a low-risk investment scheme that pays investors monthly interest payments. POMIS (as it is called too) has the support of our government. Every quarter – the interest rates are re-established (just like any other scheme out there). The spot interest rate of POMIS is 6.60%. POMIS has a five-year lock-in duration. The depositor can withdraw or reinvest the whole amount when the scheme reaches the date of maturity.
It needs a minimum of Rs. 1,500 and a maximum of Rs. 4,50,000 for an individual applicant. However – the highest ceiling for combined holding is INR 9,00,000. You can also transfer a POMIS account from one post office to another post office. Furthermore – after one year of account opening, this post office savings plan allows early withdrawals. These early withdrawals, however, come with consequences.
3) The Post Office Time Deposits
One of the most famous post office savings plans is the Post Office Time Deposit Account or POTD. Every quarter, the Finance Ministry determines interest rates. The rates are calculated by dividing the yield on government securities by the government sector yield.
A minimum of Rs. 1,000 is needed in order to open the post office FD account. You can open a POTD account for a year, two years, three years, or five years. The depositor could also choose to reinvest their interest. This option, however, is not accessible for a one-year TD. Alternatively, You can redirect the claim to a five-year recurring deposit arrangement.
4) The Post Office Recurring Deposit Account
Investors can save every month with the 5 Year Post Office Recurring Account. The interest is compounded every three months. Here, you can see a 60-month installment. The citizens who want to save regularly through monthly payments should use Post Office RD. The post office savings interest rate right now is 5.8% for a year for the scheme. While you use the RD calculator, you can also estimate the returns on Recurring Deposit investments.
The minimum investment is Rs. 10, and the maximum investment is unlimited. If you are above18 years o age (who is a major ) and who is a resident of Indian nationality – you could open the post office account. Minors (that is, the citizens who are below 18) under the age of 10 could also open and administer a statement with a guardian. The parent or guardian could also create an account for their minor children.
5) The Sukanya Samriddhi Account
The Sukanya Samriddhi Yojana (SSY) initiative of the Indian government promotes the “Beti Bachao, Beti Padhao” campaign. The government established this post office savings scheme in 2015 to encourage girls to attend school and marry. It is a fixed-income investment that assures interest returns. The interest rate is 7.6% for the current quarter (January to March 2021). The interest rate is adjusted quarterly. You can use the Sukanya Samriddhi Yojana Calculator to determine the potential returns from this scheme.
Before the applicant attains the age of 10, the parents or the guardians of a girl child might invest on her behalf in this scheme. When the girl completes the age of 21 – the project matures. Also, remember – this scheme is only open to Indian residents.
6) The Senior Citizen Saving Scheme
The Senior Citizens Savings Scheme is a post office savings scheme for senior citizens (above the age of 65). It is also a scheme that has the support of the Indian government. The post office saving system provides both monthly income and security for depositors. Interest payments offer a steady source of income. Each quarter, the interest is compounded and credited into the investor’s account. These interest rates are also adjusted every three months. The scheme’s interest rate for the current quarter is 7.40%.
This post office savings plan is locked in for five years. Investors can also prolong the scheme’s investment tenure by another three added years. These investments are tax-deductible under Section 80C (so you will also get tax benefits). Interest income – on the other hand, is taxable. The minimum and highest investment amounts for the scheme, respectively, are – Rs. 1,000 and Rs. 15,00,000. Though – TDS is also deducted if the interest exceeds Rs. 50,000.
If you want to be 100% sure about your investments and returns, then the post office is the right place to go. You can be sure of your returns and not worry about any kinds of loss.