Post Office Savings Schemes offers
- Savings Account
- Recurring Deposit (RD) Account
- Time Deposit (TD) Account
- Monthly Income Scheme (MIS) Account
- Public Provident Fund (PPF) Account
- National Savings Certificates (NSC)
- Senior Citizen Savings Scheme (SCSS) Account
- Kisan Vikas Patra (KVP) and
- Sukanya Samriddhi Accounts.
Post Office Tax Saving Schemes
Deposits in some post office schemes are eligible for deduction from income under section 80C of Income Tax Act.
5 Years Time Deposits
Investment in post office time deposit for 5 years is eligible for deduction from income under section 80C of IT Act. Minimum amount for open time deposit is ₹200 and in multiple thereof. No maximum limit.
Interest rate for 5 years time deposit is 7.8% from 1.10.2016
Public Provident Fund (PPF)
The Public Provident Fund (PPF) is a tax saving investment. PPF was introduced by the Ministry of Finance of India in 1968. Deposits made towards PPF accounts can be claimed as tax deductions and interest earned on those deposits are also tax-free. Withdrawals are exempt from tax. The PPF interest rate is 8% per annum from 01.10.2016.
Minimum annual deposit is ₹500 and maximum annual deposit allowed is ₹1.5 lakhs. Investment up to ₹1 lakh is eligible for deduction under section 80C of IT Act.
Tenure of PPF account is 15 years, account continuance is allowed beyond maturity for 5 years at every renewal, with or without making additional deposits.
Loans can be availed against funds held in the PPF account from year 3 to year 6.
National Saving Certificates (NSC)
NSC specially designed for government employees, businessmen and other salaried classes who are income tax assesses. There is no maximum limit for investment in NSC. Investment up to ₹100,000.00 is eligible for deduction under section 80C of Income Tax Act.
The interest rate for NSC VIII Issue is 8%.
Maturity value of a certificate of ₹100.00 purchased on or after 01.10.2016 shall be ₹146.93 after 5 years.
Maturity value of a certificate of ₹100.00 purchased on or after 01.04.2012 shall be ₹147.61 after 5 years.
Certificates can be kept as collateral security to get the loan from banks.
Kisan Vikas Patra (KVP)
Investment under this scheme is eligible for deduction under section 80C of IT Act. Minimum deposit is ₹1000 and no maximum limit. This certificate is available in denomenation of 1000, 5000, 10,000 and 50,000.
Interest rate is 7.7%
Senior Citizen Savings Scheme (SCSS) Account
An individual of the age 60 or more can open this account with post office. Maturity period of this account is 5 years and interest rate is 8.5% from 01.10.2016.
Deposit under this scheme is eligible for deduction under section 80C of the Income Tax Act.