SMALL SAVINGS

Popularly referred to as Post Office Schemes. Schemes designed by National Small Savings Institute under the Ministry of Finance and Department of Economic Affairs.

NATIONAL SAVINGS CERTIFICATE:

1. Period of Deposit – 5 years (VIII Issue) and 10 years (IX Issue) from date of issue.
2. Interest – (VIII Issue) 8.3% & (IX Issue) 8.8% compounded half yearly.
3. Payment on maturity.
4. Premature Payment - Allowed only in case of death of the holder, forfeiture by a pledge, or under orders of court of Law.
5. Denominations - Rs. 100, 500, 1000, 5000, & 10000.
6. No TDS
7. Contribution to NSC is eligible for deduction under sec 80C of Income tax Act 1961.

POST OFFICE MONTHLY INCOME SCHEME:

An ideal scheme for Retired and Senior Citizens needing regular monthly income

1. Maturity period is 5 years.
2. Rate of Interest - 8.4% per annum, payable monthly. Rate subject to change every year and applicable to deposits made during the relevant period.
3. No tax deduction at source (TDS).
4. Minimum investment amount is Rs.1500/- or in multiple thereafter.
5. Maximum amount is Rs. 4.50 lakhs in a single account and Rs.9 lakhs in a joint account.
6. Account can be opened by an individual, or jointly, and in case of a minor through a guardian.
7. Premature closure of account permitted after 1 year but on or before 3 years @ 2 % discount and 1% if account is closed prematurely after three years.

SENIOR CITIZEN SAVINGS SCHEME:

Scheme for persons aged 60 years or more. Persons who are 55 years or more but less than 60 years and have retired under a Voluntary Retirement Scheme or a Special Voluntary Retirement Scheme are also permitted to open the account. However they have to open the account within three months from the date of retirement. No age limit for the retired personnel of Defence services provided they fulfill other specified conditions.

Account can also be opened at Nationalised Banks
1. Interest @ 9.2% per annum from the date of deposit on a calendar quarterly basis .
2. Minimum deposit is Rs 1000 and multiples thereof. Maximum limit – Rs. 15 lakhs.
3. Maturity period - 5 years and can be extended for a further period of 3 years.
4. Account may be opened in individually or jointly with spouse.
5. TDS applicable if the interest amount is more than Rs 10,000/- per annum. Form 15H is accepted for non deduction of tax.
6. Investment up to Rs 1,50,000/- per annum qualifies for Income Tax Rebate under section 80C of IT Act.
7. Premature closure is allowed after one year. Penalty of 1.5% of the deposit and after 2 years on deduction of 1%.

POST OFFICE TIME DEPOSIT SCHEME

Similar to Fixed Deposit with Banks except that these are opened in Post offices and for period of 1 year, 2 year, 3 year and 5 year
Account can be opened either individually or jointly.
Interest payable annually but compounded quarterly:

PERIOD RATE OF INTEREST
One Year 8.20%
Two Years 8.30%
Three Years 8.40%
Five Years 8.50%

1. Minimum amount of deposit is Rs 200/- and in multiples of Rs 200/- thereafter. No maximum limit. Investment in 5 year POTD up to Rs 1,50,000/- per annum qualifies for Income Tax Rebate under section 80C of IT Act.
2. Interest income is taxable.
3. Reinvestment on maturity of an account permitted.
4. Premature closure permitted 6 months. If prematurely closed, after 6 months but before 1 year - simple interest @ rate applicable to Post Office Savings account payable.
5. In case of 2 year, 3 year or 5 year accounts if closed after one year, interest shall be calculated at a discount of 1% on the rate specified for respective period
6. Account can be pledged as security against a loan to banks/ Government institutions.

PUBLIC PROVIDENT FUND:

An ideal investment for both salaried as well as self employed. The scheme is for 15 years. Account is extendable in blocks of 5 years after maturity. Non-Resident Indians (NRIs) are not eligible to open the account however, an existing account can be continued till maturity.

1. Minimum deposit is 500/- per annum. Maximum deposit is Rs. 1,50,000/- per annum
2. Rate of Interest 8.7% per annum w.e.f. 01-04-2013. Interest is completely tax-free.
3. Investment up to Rs 1,50,000/- per annum eligible for Income Tax Rebate under section 80C of IT Act.
4. Deposits can be made in lumpsum or in 12 installments.
5. One deposit with a minimum amount of Rs 500/- is mandatory in each financial year.
6. Withdrawal is permissible from 6th financial year.
7. Loan facility is available from 3rd financial year upto 5th financial year. The rate of interest charged on loan is 2% p.a.
8. Free from court attachment.

Disclaimer: This data above does not purport to be advice nor a complete guide on products or investing. An Investor must consult a licensed professional, on any of his investment decisions before investing.