Post office offers a host of saving schemes with different rates of interest. Two of the nine savings schemes, post office offers are Sukanya Samriddhi Account and Senior Citizens Savings Scheme (SCSS). The senior citizen scheme is for people above the age of 60 years while the Sukanya Samriddhi scheme is meant for a girl child. These savings schemes offer more than 8 per cent interest rate. The interest rate on these post office saving schemes move in line with the government's interest rates on small savings schemes, which are revised on a quarterly basis.
Post office Sukanya Samriddhi scheme and Senior Citizen Saving Scheme in detail:
Sukanya Samriddhi scheme
Sukanya Samriddhi scheme offers an interest rate of 8.4 per cent per annum. The investment is calculated and compounded on an annual basis.
A natural or legal guardian can open the account in the name of a girl child. A guardian can open only one account in the name of one girl child and maximum two accounts in the name of two different girl children. The account can be opened up to age of 10 years only from the date of birth.
This scheme requires a minimum investment of Rs. 250 and a maximum of Rs. 1,50,000 in a financial year. The subsequent deposit should be made in multiple of Rs. 100, said India Post. Deposits can also be made in lump-sum amount. However, there is no limit on the number of deposits either in a month or in a financial year.
The account can be closed after completion of 21 years. However, normal premature closure is allowed after completion of 18 years, provided that girl is married.
Senior Citizen Saving Scheme
Interest rate and amount
The scheme offers a return of 8.6 per cent per annum. The minimum amount required to open the SCSS account is Rs. 1,000 and the maximum amount should not exceed Rs. 15 lakh, according to India Post.
An individual of the age of 60 years or more is eligible to open this account. An individual of the age of 55 years or more but less than 60 years who has retired on superannuation or under VRS can also open account subject to certain conditions.
The account can be opened by cash if the amount is below Rs. 1 lakh. However, if the amount is Rs. 1 lakh or more, investors need to deposit a cheque. Under the scheme, nomination facility is available at the time of opening and also after opening of account.
The maturity period of senior citizen saving scheme is five years. Premature closure of the SCSS account is allowed after one year on deduction of an amount equal to 1.5 per cent of the deposit and after two years on deduction of an amount equal to 1 per cent of the deposit.
Income tax benefits
Investments under this scheme qualify for benefit under Section 80C of the Income Tax Act, 1961. TDS is deducted at source on interest if the interest amount is more than Rs. 10,000 per annum.