Post Office Saving Scheme is a money depositing avenue for investors controlled by India Post. This scheme was launched in order to provide investment options as well as inculcate the discipline of savings in people across economic backgrounds. This government-backed investment scheme allows a person to park his money in any post office across the country. The post office saving scheme offers several products that are reliable and give risk-free returns on investments. Each scheme offers different types of saving plans that can be suitable for people across all age groups and economic backgrounds.
There are 9 types of post office investment schemes: 5-Year Post Office Recurring Deposit Account (RD), National Savings Certificates (NSC), Post Office Monthly Income Scheme Account (MIS), 15-Year Public Provident Fund Account (PPF), Sukanya Samriddhi Account (SSA), Post Office Savings Account, Post Office Time Deposit Account (TD), Senior Citizen Savings Scheme (SCSS), and Kisan Vikas Patra (KVP).
The benefits of investing in a post office saving scheme are as follows:
1) Various Products
Under the post office saving schemes, there are a variety of investment options from the PPF to Kisan Vikas Patra and Senior Citizens Saving Scheme. The availability of these small saving schemes by the post office provides a safe investment avenue for citizens. These schemes are easy to manage as they provide good returns and keep all investments safe.
2) Minimal Documentation
These schemes require limited documentation. So while the procedures conducted by the post offices are thorough, the process in itself is quite hassle-free.
3) Suits Retirement Planning
The investments in this scheme are long-term oriented and more forward-looking. Post office saving schemes are perfect options for pension and retirement planning.
4) Minimum Deposit
Each of these schemes is easy to invest in due to their minimum deposit amount making them feasible to both rural and urban investors.
5) Favourable Interest Rates
The interest rates range between 4% to 9% and are also risk-free. They are risk-free as the government of India is responsible for these investment options.
6) Tax Exemption Benefits
Under Section 80C of the Income Tax Act, most of these schemes offer tax exemptions on the initial deposit amount. In schemes like the SCSS, the Sukanya Samriddhi Yojana, PPF, etc. the amount of interest earned is also exempt from tax.