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Officially known as the National Savings Monthly Income Account, the Post Office Monthly Income Scheme (MIS) offers assured returns on lump sum investments made into the account. Below are some of the key features of this post office investment option:
| Minimum Investment Amount | Rs. 1000 |
| Maximum Investment Allowed | Rs. 9 lakh (individual)/Rs. 15 lakh (joint account) |
| Interest Rate (1st April 2023 onwards) | 7.4% p.a. |
| Payout Frequency | Monthly |
| Maturity | 5 years from date of account opening |
| Premature Withdrawal | Allowed after completion of 1 year |
Deposits made into this account do not provide any income tax benefits. Additionally, the interest earned from this post office investment is fully taxable in the hands of the account holders.
The Post Office Recurring Deposit account is also known the National Savings Recurring Deposit Account. The features of a Post Office RD are similar to recurring deposit accounts offered by banks. Below are some key features of these post office investments:
| Minimum Investment Amount | Rs. 100 per month |
| Maximum Investment Allowed | No maximum limit |
| Interest Rate (1st April 2023 onwards) | 6.2% p.a. (compounded quarterly) |
| Deposit Frequency | Monthly |
| Maturity | Max. 5 years, extension for further 5 years allowed |
| Premature Withdrawal | Allowed after completion of 3 years from account opening date |
| Loan Option | Up to 50% of RD account balance can be obtained as loan after completion of 1 year |
Similar to the POMIS scheme, there is no tax benefit of deposits being made into a Post Office RD account. The interest earned is also completely taxable in the hands of the investor.
The National Savings Time Deposit Account is the official name of the Post Office Fixed Deposit scheme. In many ways, this scheme operates similar to a fixed deposit offered by banks. However, this scheme is backed by the Government of India and the interest rate is decided by the Ministry of Finance. Some of the key features of this post office investment are:
| Minimum Investment Amount | Rs. 1000, higher amounts in multiples of Rs. 100 |
| Maximum Investment Allowed | No maximum limit |
| Deposit Tenure | Minimum 1 year, Maximum 5 years |
| Interest Rates (1st April 2023 onwards) | · 6.8% p.a. (1 year a/c) · 6.9% p.a. (2 year a/c) · 7.0% p.a. (3 year a/c) · 7.5% p.a. (5 year a/c) |
| Premature Withdrawal | Allowed after completion of 6 months from account opening date |
| Pledging Option | Can be pledged to below authorities: · President of India/Governor of State · RBI/Scheduled Bank/Co-operative Bank/Co-operate Society · Government Company/Local Authority/Public or Private Corporation · Housing Finance Company |
| Extension Option | Allowed for the same period as the initial deposit after the initial deposit matures |
The 5-year Post Office FD offers tax benefit of up to Rs. 1.5 lakh under Section 80C of the Income Tax Act similar to a tax-saver FD account opened at a bank. The interest earned from this post office investment is taxable irrespective of the deposit tenure.
The National Savings Certificate (NSC) is a government-backed tax-saving scheme that is available through any India Post Office. The currently available NSC VIII Issue requires a lump sum investment and the maturity amount including interest is paid out at maturity. Below are some key features of the National Savings Certificate:
| Minimum Investment Amount | Rs. 1000, higher amounts in multiples of Rs. 100 |
| Maximum Investment Allowed | No maximum limit, tax benefit limited to Rs. 1.5 lakh in a FY |
| Deposit Tenure | 5 years |
| Interest Rates (1st April 2023 onwards) | 7.70% p.a. (compounded annually) |
| Closure of Account | NSC account can be closed before completion of 5 years if: · Account holder/all account holders are deceased · By order of court · On forfeiture of pledgee who is a Gazetted officer |
| Transfer Options | Investment can be transferred if: · By order by court · If account is pledged to specified authorities · To joint holder holder on demise of primary holder · To nominee/beneficiary on demise of account holder |
Deposits made into National Savings Certificate are eligible for tax benefits and interim interest earned is also eligible for tax deduction. However, the interest earned in the final year is taxable at the income tax slab rate of the account holder.
Kisan Vikas Patra is a post office investment that has a unique proposition – it doubles your investment after a specific period of time. So, the period of investment changes based on applicable interest rate that is locked in at the time of initial investment. Below are some of the key features of this long-term investment option:
| Minimum Investment Amount | Rs. 1000, higher amounts in multiples of Rs. 100 |
| Maximum Investment Allowed | No maximum limit |
| Deposit Tenure | 115 months (based on current interest rate) |
| Interest Rates (1st April 2023 onwards) | 7.50% p.a. (compounded annually) |
| Closure of Account | KVP account can be closed before maturity if: · Sole Account holder/all joint holders are deceased · A court orders it · On forfeiture of pledgee who is a Gazetted officer |
| Transfer Options | Investment can be transferred if: · Ordered by a court · If account is pledged to any specificied authorities · To joint holder holder on demise of primary holder · To nominee/beneficiary on demise of account holder |
Under current rules, Kisan Vikas Patra investments do not offer any tax benefits to the investor. The interest received at maturity is completely taxable in the hands of the account holder.
The Mahila Samman Savings Scheme was announced in Budget 2023 and it is specifically available to women or minor girl child. This scheme has been opened for deposits on 1st April 2023. Below are some key features of this post office investment:
| Minimum Investment Amount | Rs. 1000, higher investment in multiples of Rs. 100 |
| Maximum Investment Allowed | Rs. 2 lakh (cumulative limit) |
| Interest Rates (1st April 2023 onwards) | 7.50% p.a. (quarterly compounding) |
| Maturity | After 2 years from date of account |
| Withdrawal Option | Up to 40% of eligible account balance can be withdrawn after completion of 1 year from date of account opening |
| Premature Closure | Allowed in specific cases like: · Compassionate grounds like life threatening disease of account holder/demise of guardian of minor account holder · After 6 months of account closure · Death of account holder |
This post office investment does not offer any tax benefits and can only be opened by a woman for herself or a guardian on behalf of a girl child.
Apart from the above mentioned options, a few other investments that you can make through the post office are – the Senior Citizens Savings Scheme and the Public Provident Fund. As a result of the popularity of these investments, they can currently be availed not just through the post office but also through public sector banks and leading private sector banks in India.
Indian post office investment schemes come with numerous benefits, and here are a few, have a look at them -
ARN: May23/Bg/02
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