Post Office Savings | Banks India 2013

5

Post Office Monthly Income Scheme (POMIS)

The Post Office Monthly Income Scheme (PO MIS) is a small investment and savings scheme.

Main Features/ Rules -

  • This scheme provides a regular monthly income to the depositors and has a term of 6 years.
  • Minimum amount of investment is Rs.1500/-, and maximum amount in case of single account is Rs.4,50,000/-, and in case of joint account is Rs.9,00,000/-.
  • Interest rate is 8% p.a. payable monthly with a bonus of 5% payable on maturity.
  • Nomination facility is available.
  • Rebate under section 80 C is NOT admissible.
  • Most suitable scheme for senior citizens and for those who need regular monthly income.
  • Deposits are exempt from Wealth Tax.
  • No TDS
  • Premature withdrawal / encashment / closure and Penalty – Premature withdrawal of the invested amount is allowed after 1 year of opening the account.
    1. If the account is closed between 1 and 3 years of opening, 2% of the deposited amount is deducted as penalty.
    2. If it is closed after 3 years of opening, 1% of the deposited amount is charged as penalty.
    3. The bonus amount is forfeited when you close the account early.
: Financial Planning, Post Office Schemes
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1

Senior Citizen Savings Scheme

Senior Citizen Savings Scheme is an investment instrument directed towards Senior Citizens.

Eligibility is 60 years of age or above, on the date of opening the account. Proof of age and a photograph of account holder are required. The age limit is reduced to 55 years in case of an individual retiring on superannuation or otherwise, or under VRS or special VRS, provided the account is opened within one month of date of receipt of retirement benefits. The retired personnel of Defence Services, excluding Civilian Defence Employees, shall be eligible irrespective of age limit.

Main Features and Rules –

  • The interest rate is 9% p.a. payable quarterly. Annualized equivalent is 9.31% p.a. assuming the interest component is re-invested. The benefit of section 80C is available on investment but interest is fully taxable.
  • The term for the scheme is 5 years. A onetime extension of three years is allowed, if applied within one year of its maturity.
  • NRIs, PIOs and HUF are not eligible to invest in this scheme.
  • Maximum limit is Rs.15,00,000/-(Rupees fifteen Lac only), however in case of retirees before the age of 60 years the limit is restricted to retirement benefits or Rs15 Lac whichever is less.
  • Any Post Office in India doing savings bank work, or an office or banking company or institution authorized by Central Government can operate this scheme. An investor can open more than one account subject to the condition, that amount in all accounts taken together does not at any point of time exceed Rs.15 Lac. At the same accounts office, two or more accounts cannot be opened during one month. Some offices insist on a gap of 30 days.
  • The investment is non transferable and non tradable.
  • Premature closure is allowed after expiry of one year subject to following conditions – After expiry of one year but before 2 years, 1.50 % of deposit shall be deducted. After expiry of 2 years, 1% of the deposit shall be deducted. No deduction is made in case of closure of account due to the death of the account holder.
  • Nomination facility is available even in case of joint account.
: Financial Planning, Post Office Schemes
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6

National Savings Certificate (NSC)

National Savings Certificate, also popularly known as NSC is a tax saving investment instrument with a maturity of 6 years.

Features and Details -

  • Minimum investment Rs. 500/- No maximum limit.
  • Rate of interest 8% compounded half yearly.
  • Rs. 1000/- grow to Rs. 1601/- in six years.
  • Two adults, Individuals, and minor through guardian can purchase.
  • Companies, Trusts, Societies and any other Institutions not eligible to purchase.
  • Non-resident Indian/HUF can not purchase.
  • No pre-mature encashment.
  • Annual interest earned is deemed to be reinvested and qualifies for tax rebate for first 5 years under section 80 C of Income Tax Act.
  • Maturity proceeds not drawn are eligible to Post Office Savings account interest for a maximum period of two years.
  • Facility of reinvestment on maturity.
  • Certificate can be pledged as security against a loan to banks/ Govt. Institutions.
  • Facility of encashment of certificates through banks.
  • Certificates are encashable any Post office in India before maturity by way of transfer to desired post office.
  • Certificates are transferable from one Post office to any Post office.
  • Certificates are transferable from one person to another person before maturity.
  • Duplicate Certificate can be issued for lost, stolen, destroyed, mutilated or defaced certificate.
  • Nomination facility available.
  • Facility of purchase/payment to the holder of Power of attorney.
  • Tax Saving instrument – Rebate admissible under section 80 C of Income Tax Act.
  • Interest income is taxable but no TDS
  • Deposits are exempt from Wealth tax.

 

: Financial Planning, Post Office Schemes
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