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Post office savings schemes

Larissa Fernand

Don't just view the post office as a place to drop your Diwali or Christmas cards. You can get some good investments here.
Of course, the carrot being dangled is the tax benefit, the notable exception being Kisan Vikas Patra. Its attractiveness lay in the interest rate being offered which has come down over the years.

Some instruments like the post office recurring deposit force you to save on a monthly basis.
Others like the PPF have an annual compulsion to it.
If you have just come into a lump sum and don't want to 'blow it up', then opt for the one-time investment of post-office time deposits. You can select an investment tenure that suits you.
The National Savings Certificate is also a one-time investment, but your money should stay deposited for six years.

If you are totally risk-averse or if you have a high tax liability, then investing in some of these schemes is a must. Below is what's available on a platter.

Instrument	Tenure	Interest	Limit on Investment	Tax Benefit	Liquidity	Availability
Post office  recurring  deposit	5	10.5 compounded quarterly	Rs 10 per month � no limit. Investments in multiples of Rs 5	Section 80L	Premature withdrawal, No loan facility	Head post offices, Select sub-post offices
Post office  time deposits	1  2  3  5	8 9 10 10.5 (compounded quarterly)	Rs 50 � no limit. Investments in multiples of Rs 50	Section 80L	Premature withdrawal, Loan facility	Head post offices, select sub-post offices
Post office  savings  account	Not applicable	4.5	Rs 50,000	Section 10	Withdrawal, No loan facility	Head post offices, Select sub-post offices
Post office  monthly  income  scheme	6	11 compounded annually (10% bonus on maturity)	Rs 2,04,000: single account Rs 4,08,000: joint account	Section 80L	Premature withdrawal, No loan facility	Head post offices, Select sub-post offices
National  Savings  Scheme  1992	None but can be closed after 4 years after the last deposit	10.5 compounded annually	Rs 100 - Rs 40,000 p.a.	Section 88, Section 80L	Premature withdrawal, No loan facility	Head post offices, Select sub-post offices
National  Savings  Certificate	6	11 compounded half-yearly	Rs 100  Rs 500,  Rs 1,000,  Rs 5,000,  Rs 10,000	Section 88, Section 80L	No premature withdrawal, No loan facility	Head post offices, Select sub-post offices
Public  Provident  Fund	15	11 (compounded annually)	Rs 100 � Rs 60,000 p.a. Investment in multiples of 100	Section 88, Section 10	Premature withdrawal, loan facility	Select post-offices, banks
Kisan Vikas  Patra	6	Investment doubles, interest compounded annually	Rs 1,000, Rs 5,000, Rs 10,000	None	Premature withdrawal, No loan facility	Post offices, brokers/ agents of LIC, UTI
RBI Relief  bonds	5	9 compounded half-yearly: cumulative	Rs 10,000 � no limit. Investment in multiples of 1000	Section 10	No premature withdrawal No loan facility	RBI agents and brokers
Deposit  Scheme for  Retiring  Employees  of PSUs  (1991)	3	10 compounded half-yearly	Rs 1,000 � total retirement benefits	Section 10	Premature withdrawal, No loan facility	SBI branches and subsidiaries, select nationalized branches, select sub-post offices
Deposit  Scheme for  Retiring  Government  Employees  (1989)	3	10 compounded half-yearly	Rs 1,000 � total retirement benefits	Section 10	Premature withdrawal, No loan facility	SBI branches and subsidiaries, select nationalized branches, select sub-post offices

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