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PERSONAL FINANCE
All About P.O. Schemes
If you're finding it difficult to invest,
look no farther than the friendly neighbourhood post
office. That's right, post office. Not many people are aware of it, but
the post office offers as many as nine investment schemes and you could
find one just for you.
By Shilpa
Nayak
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Postal Saving
Options
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|
Indira
Vikas Patra |
| WHAT
IS IT? |
A
transferable interest bearing instrument |
| WHO
CAN BUY IT? |
Individual,
jointly or singly, or adult on behalf of minor |
| HOW
IT WORKS? |
The
money doubles in six-and-a-half years |
| THE
INTEREST RATE |
9.5%
p.a. compounded annually |
| INVESTMENT
LIMIT |
No
limit |
| REDEMPTION |
6
years 6 months |
| EARLY
WITHDRAWAL |
No
possible |
| TAX
BENEFIT COMMENT |
Nil |
| COMMENT |
Banks
accept IVPs as security; lost certificates are lost forever |
|
Kisan
Vikas Patra |
| WHAT
IS IT? |
An
interest bearing debt instrument |
| WHO
CAN BUY IT? |
individual--jointly
or singly, or adult on behalf of minor |
| HOW
IT WORKS? |
The
money doubles in 7 years & three months |
| THE
INTEREST RATE |
9.5%
p.a. compounded annually |
| INVESTMENT
LIMIT |
No
limit |
| REDEMPTION |
7
years 3 months |
| EARLY
WITHDRAWAL |
Available
after two-and-a-half years |
| TAX
BENEFIT COMMENT |
Nil |
| COMMENT |
Nomination
facility is available |
|
Monthly
Income Scheme |
| WHAT
IS IT? |
Some
earns an interest on a monthly basis; ideal for retirees |
| WHO
CAN BUY IT? |
Only
individuals, either singly or jointly |
| HOW
IT WORKS? |
Interest
is paid on a monthly basis and principal with bonus on
redemption |
| THE
INTEREST RATE |
9.5%
p.a. payable monthly; bonus of 10% on maturity |
| INVESTMENT
LIMIT |
Rs
3 lakh in single account and Rs 6 lakh in joint account |
| REDEMPTION |
6
years |
| EARLY
WITHDRAWAL |
After
a year; 5% deducted (not if the account is closed after 3 years) |
| TAX
BENEFIT COMMENT |
Interest
is deductible U/S 80 |
| COMMENT |
Nomination
facility is available |
|
National
Saving Certificate |
| WHAT
IS IT? |
Tax-saving
instrument that provides reasonable returns |
| WHO
CAN BUY IT? |
Individual,
adult on behalf of minor; HUFs not allowed |
| HOW
IT WORKS? |
Principal
and interest is given as a lumpsum on maturity |
| THE
INTEREST RATE |
9.5%
p.a. compounded 6-monthly |
| INVESTMENT
LIMIT |
No
limit |
| REDEMPTION |
6
years |
| EARLY
WITHDRAWAL |
Between
1-3 years, at a discount; after 3 years as specified |
| TAX
BENEFIT COMMENT |
Upto
Rs 60,000 for tax rebate u/s 88; no TDS on interest |
| COMMENT |
Nomination
facility is available |
|
National
Savings Scheme |
| WHAT
IS IT? |
Deposit
a lumpsum in a year and avail tax benefits |
| WHO
CAN BUY IT? |
Individual,
HUF; only one account in a year |
| HOW
IT WORKS? |
Principal
and interest is given as a lumpsum on maturity |
| THE
INTEREST RATE |
9%
p.a. credited annually on April 1st |
| INVESTMENT
LIMIT |
Minimum
Rs 100; maximum, no limit |
| REDEMPTION |
6
years |
| EARLY
WITHDRAWAL |
Interest
can be withdrawn anytime; but deposits after 4 years |
| TAX
BENEFIT COMMENT |
Tax
rebate u/s 88; TDS @ 20% on withdrawals more than Rs 2,500 |
| COMMENT |
Nomination
facility is available |
|
Public
Provident Fund |
| WHAT
IS IT? |
A
saving-cum-tax saving investment avenue |
| WHO
CAN BUY IT? |
Individual,
HUF; those with GPF, EPF, CPF accounts |
| HOW
IT WORKS? |
Interest
is credited to the account till withdrawal |
| THE
INTEREST RATE |
9.5%
p.a. compounded annually |
| INVESTMENT
LIMIT |
Minimum
of Rs 100 and maximum Rs 60,000 in a year |
| REDEMPTION |
15
years; can be extended in blocks of 5 years |
| EARLY
WITHDRAWAL |
Allowed
every year from the 7th with prescribed ceilings |
| TAX
BENEFIT COMMENT |
No
TDS on interest |
| COMMENT |
Nomination
facility is available; 12 deposits can be made in a year |
|
Recurring
Deposit |
| WHAT
IS IT? |
Fixed
amount deposited every month |
| WHO
CAN BUY IT? |
Individual,
jointly or singly, and adult on behalf of a minor |
| HOW
IT WORKS? |
Works
like a regular recurring deposit |
| THE
INTEREST RATE |
9.5%
p.a. compounded quarterly, paid on maturity |
| INVESTMENT
LIMIT |
Minimum
Rs 10; maximum any amount |
| REDEMPTION |
At
the end of 5 years |
| EARLY
WITHDRAWAL |
One
only, upto 50% of the deposits if the account has been operational
for a year |
| TAX
BENEFIT COMMENT |
Interest
qualifies for deduction u/s 80 L; no TDS on interest |
| COMMENT |
Nomination
facility is available; four defaults allowed |
|
Saving
Deposit |
| WHAT
IS IT? |
Just
like a savings bank account |
| WHO
CAN BUY IT? |
Individual,
jointly or singly, and adult on behalf of a minor |
| HOW
IT WORKS? |
Works
like a normal SB account |
| THE
INTEREST RATE |
3.5%
p.a. on individual/joint accounts |
| INVESTMENT
LIMIT |
Min.
Rs 20; max. Rs 1 lakh (Rs 20 lakh for joint account) |
| REDEMPTION |
NA |
| EARLY
WITHDRAWAL |
NA |
| TAX
BENEFIT COMMENT |
Interest
is totally free from income-tax |
| COMMENT |
Nomination
facility is available |
|
Time
Deposit |
| WHAT
IS IT? |
Operates
like a bank fixed deposit |
| WHO
CAN BUY IT? |
Individual,
jointly or singly, or adult on behalf of minor |
| HOW
IT WORKS? |
One
gets a lumpsum at maturity |
| THE
INTEREST RATE |
Upto
1 year - 7.5%; 1-2 years - 8%; 2-5 years - 9% p.a. calculated
quarterly |
| INVESTMENT
LIMIT |
No
limit |
| REDEMPTION |
1-5
years |
| EARLY
WITHDRAWAL |
After
6 months at an interest which is 2% lesser |
| TAX
BENEFIT COMMENT |
Interest
qualifies for deduction u/s 80 L; no TDS on interest |
| COMMENT |
Nomination
facility is available |
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