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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