Department of Post, considered the backbone of India’s communications fabric, with 154866 post offices in the country, is the the largest in the world. With around 1,39,040 post offices in rural areas alone, the department is further widening its reach and functioning by diversifying into several domains such as insurance, money transfer and retail services among others.
The Post Office Savings Bank (POSB) is the oldest and largest banking institution in the country. It operates over 238 million savings accounts. The Post Office Savings Bank schemes are a function performed by the Department of Posts on behalf of the Ministry of Finance.
The eight savings schemes offered by the department are savings accounts, recurring deposits, time deposit, monthly income scheme, public provident fund, Kisan Vikas Patras (KVP), National Savings Certificate (NSC) and Senior Citizens Savings Scheme (SCSS).
India Post Office Time (Fixed) Deposit Scheme
Post Office Monthly Income Scheme
In terms of investments that offer assured returns, fixed deposits and recurring deposits from banks as well as the postal department might be well known to people from across India. Another lucrative scheme that offers similar rates and a lot of flexibility is the Monthly Income Scheme (MIS) from India Post and is available for opening across all post offices.
With a rate of interest as high as 8.40%, this interest is calculated on an annual basis and payable every month, allowing the account holder to avail a monthly income on his/her investment. The interest payable can be withdrawn into savings account at the same post office or if the account is at a CBS post office, the monthly income can be auto credited into any savings account at any CBS post office. The interest, if not withdrawn, will not accrue any additional interest though. The MIS account itself is transferrable to any post office across India. The account can have a maximum of Rs. 4.5 lakh as individual investment and Rs. 9 lakh as joint account investment. The maturity period of the account is five years.
Who can open a fixed deposit account with India Post Office?
Any individual (a single adult or two adults) can open a term deposit account.
How to open an account?
An individual can open an account at any head post office or general post office after filling out the deposit opening form provided by the post office. The following documents have to be furnished to facilitate the opening of the account.
Is the fixed deposit scheme offered by India Post available online?
No. The scheme is not available online.
What is the minimum amount required to open a FD account with India Post Office?
The minimum amount needed to open a fixed deposit account is Rs. 200.
What is the maximum amount that can be deposited in a FD account with India Post Office?
There is no limit to the maximum amount which can be deposited in the account.
What is the procedure to open a fixed deposit account at Indian Post Office account?
Does India Post offer tax saver fixed deposits?
There are no specific tax saver deposit schemes. There is no tax benefit on deposits under five years. The five-year deposit is, therefore, deductible under section 80C.
What are the main features of India post office fixed deposit scheme?
Are loans provided against FDs at India Post Office?
Yes. FD account can be pledged as security against a loan.
Does India Post Office offer senior citizens any special rates on their fixed deposits?
No. Senior citizens do not get any special rates for FD schemes.
Does India Post impose any penalties for premature withdrawal of FD deposits?
Premature withdrawal or closure is permitted after completion of six months of opening the deposit. The account can be closed after 6 months and before one year of opening the account, in which case, the amount invested is returned sans interest to the depositor. If a time deposit of two or three years is withdrawn prematurely, interest will be paid only for the completed years. (In case of a bank FD, if a bank imposes penalties, the depositor will be paid interest at a lower rate than what was opted for).
Can NRIs open a FD account in India Post?
No. Only residents of India preferably with a post office savings bank account can open a fixed deposit account under the scheme.
With reduced rate of interest on small savings schemes coming into effect on April 1, and the first half of March saw around 50 lakh transactions as against the average of 20-30 lakh transactions taking place in a year.
Around 13 lakh new accounts were opened in the second half of March as against 4 to 5 lakh seen in an average month, an official said. This rush was a result of citizens trying to secure themselves against the revised interest rates, which have been brought down by up to 130 basis points.
Post office savings schemes give interest rates prevalent at the time of transaction. The interest rate on certain Post Office Fixed Deposits are as follows: 2-year term deposit now earns 7.2 percent instead of 8.4 percent, 3-year fixed deposit will get 7.4 percent instead of 8.4 percent, and 5-year deposit will get 7.9 percent instead of 8.5 percent.
18th April 2016
There are number of small savings schemes available in the market such as PPF, NSC and Post Office Term Deposits by investing in which investors can avail tax benefits. Among these various schemes, the Post office Term Deposits not only offer higher and attractive rates of interest, but investors can also enjoy tax benefits by investing in them. These investments are counted as a deduction under section 80C of the Indian Income Tax Act, 1961. However, the interest amount earned from these deposits are taxable. Usually, an investor can invest for a tenure of 1 to 5 years under these deposit schemes. These deposits can be automatically as well as withdrawn by paying a nominal penalty fees. There is no-lock in period involved in Post Office Term Deposits.
20th November 2015
The Indian Postal System has introduced a fixed deposit scheme meant especially for girls to promote the welfare of the girl child. Termed ‘Suzanna Samriddhi’, the fixed deposit scheme can be opened by a legal guardian for a girl child.
The account can be opened for girl children of up to 10 years of age and the tenure of the deposit will be 21 years from the date of the first deposit. Till a period of 14 years from the date of the first deposit, additional deposits can be made. The maximum amount of deposit per year is limited to Rs. 1,50,000 and the minimum amount is Rs. 1000. Further deposits can be made in any amount and any number of times in a financial year. Additionally, reaching a deposit of Rs. 1,50,000 allows the deposit to avail tax benefits.
This particular scheme is aimed at providing aid to the girl child in higher education, marriage and other needs as the case may be.
14th February, 2015