Small savings schemes are designed to provide safe and attractive investment options to the public and at the same time to mobilise resources for development.
These schemes are operated through about 1.54 lakh post offices throughout the country. Public Provident Fund Scheme is also operated through about 8000 branches of public sector banks in addition to the post offices. Deposit Schemes for Retiring Employees are operated through selected branches of public sector banks only.
The rates of interest applicable on various small savings schemes for the quarter from Jan to Mar 2017 effective from 1.1.2017 would be as below;
The new rate of Interest on Sukanya Samriddhi Scheme (SSA ) is 8.5%.
The new rate of Interest on PPF (Public Provident Fund) would be 8%.
The interest rate on Senior Citizen Savings Scheme (SCSS) is 8.5%.
New interest rate on Kisan Vikas Patra (KVP) would be 7.7%.
The rate of interest on 5 year National Savings Certificate (NSC) is 8%.
New interest rate on post office MIS (Monthly Income Scheme) is 7.7%
The rate of interest on a 5 year Post Office RD (Recurring Deposit) would be 7.3%.
A monthly income scheme is offered by post offices to those that require a monthly income. This scheme is ideal for retired people whereby they can deposit their life savings with the post office and earn a monthly income from the interest earned. You can deposit a minimum of Rs. 1,500 up to Rs. 4.5 lakhs (Rs. 9 lakhs in a joint account). Interest earned is 8% per annum and the maturity period is six years. You can also withdraw money after a year. Withdrawal can be made within one and three years at a discount of 2% of the deposit. If the withdrawal is made after three years, the discount is 1% if the deposit.
A recurring deposit is a scheme where you save a fixed amount with the post office every month for a duration that is specified at the start of the scheme. The advantage of recurring deposit is that you feel liable to deposit the agreed amount every month because that earns you interest. Another reason why recurring deposits are attractive is because you attract penalties when you don’t make your deposits on time and also lose out on the interest. A recurring deposit scheme is a safe and sure way to save for the future.
In India, there are multiple post office savings schemes that are available to you as an individual. These schemes are somewhat like bank accounts where you deposit money. Your deposited money earns interest and you also get facilities like passbook and cheque books. You can opt for a regular scheme, a recurring scheme and even a monthly income scheme. Other schemes include Kisan Vikas Patra and National Savings Certificates etc.
The Senior Citizens savings schemes are available to the senior citizens of the country. This scheme is for a duration of five years where you can make a single deposit in multiples of Rs. 1,000 up to Rs. 15 lakhs. This scheme earns an annual interest of 9%.
The Public Provident Fund is an excellent tax saving instrument. You can deposit a minimum of Rs. 500 to a maximum of Rs. 70,000 in a financial year that earns an interest of 8% that is compounded annually. You get tax deductions under Section 80C of the Income Tax Act and the interest earned is tax free. You can also withdraw money every year starting with the seventh financial year. You can also avail a loan against your deposit from the third financial year.
Deposits in National Savings Certificates help you avoid income tax under Section 80C of the Income Tax Act. The annual interest earned will earn the same rebate if it is deemed to be reinvested. The minimum deposit is Rs. 100 without any upper limit. Interest is earned at 8% annually but compounded every six months. The interest is paid on maturity.
Kisan Vikas Patra is a saving certificate scheme which was first launched in 1988 by India Post. It was successful in the early months but afterwards the Government of India set up a committee under supervision of Shayamla Gopinath which gave its recommendation to the Government that KVP could be misused. Hence the Government of India decided to close this scheme and KVP was closed in 2011. However the new Government formed in 2014 decided to relaunch this scheme following which the scheme was relaunched in 2014.
Sukanya Samriddhi Account (literally Girl Child Prosperity Account) in a Government of India backed saving scheme targeted at the parents of girl children. The scheme encourages parents to build a fund for the future education and marriage expenses for their female child.
The scheme was launched by Prime Minister Narendra Modi on 22 January 2015 as a part of the Beti Bachao, Beti Padhao campaign. The scheme currently provides an interest rate of 9.2% and tax benefits. The account can be opened at any India Post office or a branch of some authorised commercial banks.
The main objective of this particular scheme is to promote the welfare of the girl child.
Post Office Time Deposit Accounts offers the facility of investing surplus funds at relatively higher rates of interest. The deposits made under this scheme for a period of 5 years are also eligible for tax benefits under section 80C of Income Tax Act.
Post office Time deposit scheme is a type of fixed deposit account offered by Department of post, Government of India at all post office. This saving plan is best for those investors who want to deposit a lump sum for a fixed period. Investor gets a lump sum (principal + interest) at the maturity of the deposit, where rate of interest on investment depend on the term of deposit.
