Indian Post Offices offer many savings schemes that are designed to help citizens in learning financial discipline. Some of such schemes are specifically aimed to help certain sections of people to save money for their welfare. There are nine such schemes namely, such as Public Provident Fund (PPF), National Savings Certificate (NSC), Post Office Monthly Income Scheme (POMIS), Sukanya Samriddhi Account (SSY), Senior Citizen Savings Scheme (SCSS), Post Office Savings Account, Post Office Recurring Deposit Account (RD), Kisan Vikas Patra (KVP), Post Office Time Deposit Account (POTD). In this article, we discuss the benefits that are offered by these schemes.
1. High Rates of Interest
Rates of interest are set quarterly by the Ministry of Finance for such schemes. These schemes usually offer higher rates of interest as compared to other schemes in the market. This promises the customer in receiving good returns after investing in such schemes.
2. Long term Investments
A lot of these schemes have a long tenure for investment. Public Provident Fund (PPF) offered by Post Office runs up to 15 years. Therefore, such schemes often seem a good opportunity for anyone who wishes to invest for a longer period.
3. Involves low risks
Most of these schemes involve very low risks and hence are considered a very safe mode of investment. For risk-averse investors or those investors who are beginning to look into investing money, such schemes are considered a great option.
4. Easy Procedure to Apply
These schemes offer the easy procedure for application with the requirement of minimal documents which saves time.
5. Tax Benefits
Most of these schemes are tax-exempt under Section 80C of Income Tax Act, 1961, i.e., tax exemption up to Rs. 1.5 Lakhs is allowed. Some schemes also offer tax deductions on the interest earned.
6. Nomination Facility
Most of such schemes offer a nomination facility for anyone while opening an account or after opening the account.
7. Transfer Facility
For most of the schemes, it is easy to transfer account opened from one post office to any other post office located anywhere in the country easily.
8. Varying features
These schemes are designed differently for meeting various financial demands of people from different walks of life. Sukanya Samriddhi Yojana is aimed to help parents or guardians of the girl child to save up for the welfare of girl child. Senior Citizens Savings Scheme is aimed to help senior citizens to meet their financial demands and live a relaxed life. Kisan Vikas Patra (KVP) was initially designed to help farmers but now is available for the wider population.
Most of these schemes can be availed by Indian residents over the age of 18 years. Some schemes like the Senior Citizen Savings Scheme and Sukanya Samriddhi Yojana have different criteria.
1. Premature Withdrawal
Most of these schemes allow premature withdrawal or closure following certain terms and conditions.