Importance Of Post Office Savings

Post Office Savings

Post office savings are offered by the Indian post office as their savings and investment schemes. Post office schemes are also like commercial bank schemes. Initially, institutions called banks used to operate the savings bank account. Thereafter, postal department took up the responsibility of providing a facility to save through their post savings accounts. When this account became popular, the Government of India could collect crores of rupees. Post office saving is the best form of savings schemes which provide substantially higher rates of interest with low risk. Besides the bank, post office offers various attractive schemes for the investors for whom safety aspect is the most important. There are various investment

Sixty equal monthly deposits are to be made in an account in multiples of Rs. 5 for the period of five years. The recurring deposit account is opened by minimum rupees 10. From 1/04/14 interest rate is 8.4% quarterly compounding. If account is opened by 10 rupees after 5 year it get 746.53 rupees.

Post Office Term Deposit Account: Under this account a minimum amount is required 200 rupees for opening a account and there is no maximum limit for deposit. In this tem deposit interest is payable annually but calculated quarterly. From 1/04/14 interest rate are for one year, two year, three year rate is 8.40% and for five year rate is 8.50%. Term deposit having five year eligible for deduction under section 80c of income tax act.

Post Office Senior Citizen Saving Account: This account is opened by individual who complete 60 year. Above 60 year comes under senior citizen. This account is specially designed for senior citizen. Account can be opened by minimum 1000 and maximum of rupees 15 lakh. It offer interest rate is 9.3% per annum from

NSCs are issued by the department of post and government of India. Since they are backed by the government of India, NSCs are a practically risk free avenue of investment. They can be bought from authorized post offices. They offer a fix rate of return per annum. This interest is calculated every six months, and is merged with the principal. That is, the interest is reinvested, and is paid along with the principal at the time of maturity. NSCs qualify for investment under Section 80C of the income tax act. Even the interest earned every year qualifies under Sec 80C. National savings certificates are available in the denominations of Rs. 100, Rs 500, Rs. 1000, Rs. 5000 & Rs. 10000 throughout the year. From 01/04/14 the rate of interest is 8.5% compounded six monthly. There is no maximum limit on the purchase of the certificates. So it is investor to decide how much amount to invest in the NSCs. This is of course a huge benefit for investor as he can decide as much as budget allows. The certificate can be encashed from the issuing post office on the due date by simply discharging the certificates at the back. Investor can avail of a loan against the certificates by pledging it to the bank. The bank will have the NSC assigned in its favour and advance up to 75 percent of face value plus the amount of accrued interest till the date of