“Post Office Savings Scheme: A Safe & Reliable Investment Option”

Post Office Savings Schemes offer different types of investment options to choose from, which allows a person to save & invest funds in a secure manner. It offers multiple benefits with an attractive rate of interest, which makes it a suitable option for those individuals who are looking for approachable financial options. This means it is best suited for those who are planning for a stable Financial Investment that offers guaranteed returns. This scheme is backed by the government & also offers taxation benefits as per section 80C of the Income Tax Act, 1961.

How to Open a Post Office Savings Scheme?

Provided are the steps to open a Post Office Savings Scheme:

Step 1: One should visit any of the nearest post office branches.

Step 2: Ask for a Saving Bank- Account Opening Form (SB-AOF) from the post office. It can also be downloaded from the Indian Post Office’s official website.

Step 3: Fill out the form with the correct details, like the type of scheme to be applied for, ID proof, address proof, initial deposit amount, etc.

Step 4: Submit the form along with KYC & other related documents.

Step 5: Deposit the amount according to the scheme opted to complete the process.

Who Can Open Post Office Savings Account?

Provided are the eligibility parameters that are to be met to apply for Post Office Savings Scheme:

• An individual must be an Indian resident.
• In the case of a minor, a bona fide guardian can open the Post office savings account.
• Also, the minimum age of the minor should be at least 10 years.
• It allows 2-3 individuals to open a joint account.
• Even a non-mentally sound individual can become a beneficiary.
• In the case of non-general schemes, eligibility will depend on factors such as the beneficiary’s earnings, age, type of work, etc.

Documents Required

Provided is the list of documents required to opt for Post Office Savings Scheme:

• Identity Proof: Aadhar card, Passport, PAN Card, Voter ID, Driving License, etc.
• Passport-sized Photograph: Two to four recent passport-sized photographs
• KYC Documents: KYC documents, like a self-attested copy of a PAN card or a declaration form
• Address Proof: Passport, Ration Card, Aadhar Card, Bank Statements, Utility Bills, rent Agreement, etc.

Types of Post Office Savings Schemes

• Post Office Savings Account (SB)

It is a transferable account, just like a savings bank account, which can be opened at a 4% interest rate.

• National Savings Recurring Deposit Account (RD)

This monthly scheme is meant for small investors, offering an interest rate of 5.8% p.a. for a period of 5 years with a minimum deposit of INR 100.

• Senior Citizens Savings Scheme Account (SCSS)

This scheme is meant for Indian senior citizens, i.e. over the age of 60 years. Also, individuals who opt for voluntary retirement after reaching 55 years of age can also open this account to receive the maturity amount after completion of 5 years. This period can further be extended for 3 more years at an interest rate of 8.2% per annum.

• National Savings Time Deposit Account

Under this scheme, an investment has to be made for a period of 5 years in a post office time deposit account, on which a deduction u/s 80C of Income Tax Act, 1961 can be availed.

• Post Office Monthly Income Scheme Account

This scheme offers a regular income flow with a minimum deposit amount of INR 1000 with an interest rate of 7.4% p.a. for a period of 5 years.

• Public Provident Fund Account (PPF)

This is a long-term plan meant for adults with a minimum deposit amount of INR 500 with an interest rate of 7.1%, offering many tax benefits.

• Sukanya Samriddhi Account (SSA)

This scheme was introduced for the empowerment of girl children in India, with an interest rate of 7.6% & a minimum deposit amount of INR 250.

• National Savings Certificate

It is a fixed-income investment scheme backed by the government that can be opened with a post office. It is meant for small- or medium-level investors, offering different tax deductions.

• Kisan Vikas Patra (KVP)

This scheme offers an interest rate of 7.5% with a minimum deposit amount of INR 1000. It allows the account to be closed prematurely after 2.5 years.

Advantages of the Post Office Savings Scheme

Provided are the benefits of the Post Office Savings Scheme:

• Variety of schemes

It offers a variety of schemes that cater to the different tastes & needs of different investors, offering different returns, deposit amounts, tax implications, etc.

• Easy enrollment

This scheme is quite easy & hassle-free to apply for, & it requires very little paperwork, making it suitable for both rural & urban investors.

• Long-term investment

Some of the schemes offered by post office schemes are meant for the long term, which will help increase savings & meet financial goals. Let us say the Public Provident fund offers a tenure of 15 years.

• Financial Planning

To calculate the estimated returns on the post office schemes, one can also use an Investment Calculator, which will help in better financial planning & decision-making. This means it will help investors to make a wise choice about which plan to be selected.

• Wider reach

Post offices are easily accessible & approachable in comparison to other banks.

• Risk-free investment with a good interest rate

These are government-backed schemes, which makes them risk-free in nature. These schemes offer the most competitive interest rates, which range between 4 to 8.2%.

• Tax benefits

Most of the post office savings schemes offer tax benefits under section 80C of the Income Tax Act, 1961, such as PPF, Sukanya Samriddhi Yojana, etc.

Conclusion

Post Office Savings Scheme is meant for those individuals who want to invest their funds in low-risk investments, i.e. with moderate returns. This scheme offers a range of benefits, such as minimal financial risk, attractive interest rates, reasonable investment options, etc. This scheme is well known amongst middle-class groups with lower incomes, senior citizens, & risk-averse individuals.