Saturday, May 19, 2012

C.POST OFFICE SAVINGS SCHEMES

Investment in Post Office Savings

Indian Postal ser­vice pro­vides var­i­ous invest­ment schemes. The most attrac­tive schemes are as fol­lows –
a) Post Office Recurring Deposits,
b) Post Office Monthly Income account,
c) Kisan Vikas Patra,
d) National Sav­ings Cer­tifi­cates,
e) Senior Cit­i­zens sav­ings scheme.
Investors can invest in these schemes in their near­est post offices.

A) POST OFFICE RECURRING DEPOSITS,


Monthly Savings Option
POST OFFICE RECURRING DEPOSIT SCHEME   (PORD)
Name of the Scheme
Interest
Maturity Period
Limit of Deposit
I.T.benefit
Place of Deposit
PORD
-----
5 years
Min: Rs.10
Deposits can be in
multiples of Rs.5. Maximum: No limit
-----
All Post Offices

For example of Rs. 10 every month for 5 years will fetch interest of Rs. 128.90/- with Principle of Rs.600/-. After 5 years the account can be continued for another 5 years at the same rate of interest.

Opening of Account


The account can be opened by a single adult of two adults jointly or a minor who has attained the age of 10 years or a guardian on behalf of a minor.

Deposits may be made a minimum of Rs.10/- once in a calendar month, in multiples of Rs.5/-. Amount of deposit made at the time of opening the account shall not be changed.

A depositor may have more than one account in his own name or jointly with others. There is no ceiling on deposit. Monthly installments can be paid in advance and in that case, a suitable rebate is allowed.

Loan Facility

Loan up to half of the deposit may be taken after one year and before maturity. This must be repaid together with interest in one or more installments. Loan not repaid is deducted together with interest from the amount payable at the time of closure of the account.

Insurance Benefit

In case of death of a depositor, his legal heir or nominee becomes entitled to get immediately the full maturity value of the account/accounts subject to the maximum account value of Rs.50 /-

(a) the account is not a discontinued one
(b) twenty four months have elapsed from the dates of opening the account, and
(c) the age of the depositor at the time of opening of the account was between 18 and 53 years.
(d) there should not be withdrawal during the first 24 months.

Account may be opened through authorised women agents under Mahila Pradhan Kshetriya Bachat Yojana (MPKBY). Recurring Deposit account may be opened through Payroll Savings Scheme for employees in State / Centre Government and Public undertakings.

B) POST OFFICE MONTHLY INCOME ACCOUNT

#  Rate of inter­est is 8% per annum payable monthly. Invest­ment of Rs 1 Lakh will give a return
    of around Rs 666.67 per month.
#  Min­i­mum invest­ment amount is Rs.1500/- or in mul­ti­ple thereof.
#  Max­i­mum amount is Rs. 4.5 Lakhs in sin­gle account and Rs. 9 Lakhs in a joint account.
#  Period of matu­rity – 6 years
#  A bonus of 5% on the prin­ci­pal is pro­vided on matu­rity.
#  Deduc­tion of 3% on the deposit amount if amount is with­drawn before 3 years
#  Deduc­tion of 2% on the deposit amount if amount is with­drawn after 3 years
#  Inter­est income is tax­able but it is not deducted at Source.
#  Account is trans­fer­able from one post office to any Post office in India free of cost.

C) KISAN­VIKAS PATRA (KVP)

Kisan Vikas Patra or KVP is a sort of savings, which is regulated with the help of government and post offices. This Kisan Vikas Patra KVP is a plan, which allows the investors to make their investments up to double amount in a less duration of time in comparisons to the other governmental plans.

The plan and subscription for Kisan Vikas Patra is now available at every post offices that are regulated through government. Kisan Vikas Patra KVP is known as the most reliable savings procedure as the government conducts it directly and regulated by it. It is also said as the most reliable way of investments just because of the support and backup of Indian government.

Subscription for a Kisan Vikas Patra or KVP can be done by completing following few requirements which are mandatory for it.

#  These requirements includes like minimum subscription of five hundred is to be done in     

     initial stage and no limit for any maximum amount like Invest­ment amount in denom­i­na­tions
    of Rs.100, Rs 500, Rs 1000, Rs 5000, Rs 10,000

#  Like other investments, in this Kisan Vikas Patra KVP plan too the Rate of inter­est is 8.4%
    per annum com­pounded yearly. Invest­ment of Rs 1 Lakh will become Rs 2 Lakhs after a
    period of 8 years and 7 months and also assures to double the amount in approximately 9
    years.

#  Kisan Vikas Patra or KVP can be subscribed by any adult in their name. Apart form it a
    minor and two adult's persons with a joint account,companies and firm can also subscribe it.

#  Here, it should be noted that any NRI or any member of Hindu Undivided Family are not
    bounded to subscribe these Kisan Vikas Patra KVP plan. Reinvestment plans are also
    present with this KVP plan.

#  But this reinvestment on Kisan Vikas Patra plan is only allowed by the authority on maturity
    of the policy.

#  Interest income is tax­able but not deducted at source

Other features apart from the above ones are also included in this KVP plan. These patras acts like an security for issuing any bank loan form credit lending institutions.

They are also transferable to any other name under the rules and regulations of Kisan Vikas Patra KVP plans. This plan is known as the best way to increase the investments without spending a long duration of time.

In a short time period with a fixed rate of interests, this plan acts as a guaranteed returning interest amount after completing the maturity of it.

D) NATIONAL SAV­INGS CER­TIFI­CATE (NSC)
 

The National Sav­ing Cer­tifi­cate makes it easy for cit­i­zens from all walks of life to save for a rainy day. With the min­i­mum amount set at Rs 100 only, one also gets an 8% inter­est on the amount cal­cu­lated biannually.

Since the NSC comes under Sec­tion 80 C, it also enti­tles you to get tax deduc­tions up to
Rs 1, 00,000. How­ever from 2005 –2006, the inter­est accu­mu­lated on the NSC amount is taxable.

NATIONAL SAVINGS CERTIFICATE ( NSC VIII ISSUE )


a) Scheme specially designed for Government employees, Businessmen and other salaried
classes who are Income Tax assesses.
b) No maximum limit for investment.
c) No tax deduction at source.
d) Certificates can be kept as collateral security to get loan from banks.
e) Investment up to INR 1,00,000/- per annum qualifies for IT Rebate under section 80 C of
Income Tax Act.
f ) Trust and HUF cannot invest.

NATIONAL SAVINGS CERTIFICATE ( NSC IX ISSUE )

a) No maximum limit for investment.
b) INR. 100/- grows to INR 234.35 after 10 years.
c) Minimum INR. 100/- No maximum limit available in denominations of INR. 100/-, 500/-
1000/-, 5000/- & Rs. 10,000/-.
d) A single holder type certificate can be purchased by an adult for himself or on behalf of a
minor or to a minor.

Buy National Savings Certificates ( NSC's ) every month for Five / Ten years – Reinvest on maturity and relax - On retirement it will fetch you monthly pension as the NSC matures.

BRIEF HIGHLIGHTS

#  Rate of inter­est is 8% per annum com­pounded six monthly but it is paid six monthly.
    Investment of Rs 1 Lakh will become Rs 1,60,100 after a period of 6 years.

#  Min­i­mum Limit is Rs 100 and No max­i­mum limit on investments.
#  Investment amount in denom­i­na­tions of Rs.100, Rs 500, Rs 1000, Rs 5000, Rs 10,000.
#  Investments in NSC are eli­gi­ble under sec­tion 80 C of Income Tax Act.
#  Annual Inter­est income qual­i­fies for tax rebate under sec­tion 80 C of income tax act, if it is
    deemed to be reinvested.

#  Individu­als and minor through guardian are eli­gi­ble to invest.
#  Inter­est income is tax­able but not deducted at source.

E) SENIOR CIT­I­ZENS SAV­INGS SCHEME

#  Rate of inter­est is 9% per annum. Inter­est is payable on 31st March / 30th Sept / 31st
    Decem­ber in the first instance and there­ after, inter­est shall be payable on 31st March,
    30th June , 30th Sep and 31st Decem­ber.

#  One time deposit of Rs 1000 and its mul­ti­ple thereof and max­i­mum amount not exceed­ing
    Rs 15 Lakhs

#  Period of matu­rity – 5 years
#  Eli­gi­bil­ity Cri­te­ria — Age should be 60 years or more, and 55 years or more but less than
    60 years who has retired on super­an­nu­a­tion or oth­er­wise on the date of open­ing of account
    sub­ject to the con­di­tion that the account is opened within one month of receipt of retire­ment
    ben­e­fits.

#  Early clo­sure is allowed after a period of one year with a deduc­tion of 1.5% inter­est and
    after 2 years 1% inter­est.

#  Inter­est income is tax­able and deducted at source, if the inter­est amount is more than
    Rs10,000 per annum.

#  Invest­ment in the scheme is eli­gi­ble for tax ben­e­fit under sec­tion 80 C of Income Tax Act.

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