project report on different post office saving schemes

PROJECT REPORT

ON

COMPARITIVE STUDY BETWEEN DIFFERENT POST OFFICE SAVING SCHEMES IN INDIA

BBA (H)

SUBMITTED BY SUPERVISED BY

PRAKHAR D ANITA NANDI

MITTAL BARMAN

BBA (H) PROF. BBA (H)

1072116

ACKNOWLEDGEMENT

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I am thankful for the assistance received from various individuals in making this project successful. I find no words to express my gratitude towards those who are constantly involved with me throughout my project in

My special thanks to Mr. Soumen Chatterjee (HOD, DOMS) who has given us the opportunity to work on such interesting project and had enabled us to know and learn a lot and gain remarkable experience.

I would like to give my special thanks and regards to Mrs. Anita Nandi Barman who has helped me to carry out this project as my project in charge under her guidance and blessing I was able to fulfill the requirements of my university.

Prakhar D Mittal

BBA (H)

1072116

_______________ ______________

Mentor’s signature Student’s signature

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CONTENTS

Sr.No.

PARTICULERS Page No.

1 Introduction 4-7

2 Literature Review 8-11

3 Need of Study 12

4 Scope of Study 13

5 Objective of Study 14

6 Research Methodology 15-18

7 Analysis 19-28

8 Findings 29-42

9 Bibliography 43

INTRODUCTION

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Indian Postal Service-

Department of Posts

Type Agency of the Government of India

Founded 1764

Headquarters New Delhi, India

Key people Radhika Doraiswamy, Director General

Industry Postal system

Employees 520,191 (As of 2007)

Website http://www.indiapost.gov.in/

The Department of Posts (Hindi: भा�रती�य डा�क विभा�ग) functioning under the brand name India Post (Hindi: भा�रती�य डा�क) , is a government operated postal system in India; it is generally referred to within India as "the post office".

Postal Services in India

India possesses the largest postal network in the world with 155,000 post offices spread all over the country as on March 31, 2001, of which 89 per cent are in the rural sector. Post offices in India play a vital role in the rural areas. They connect these rural areas with the rest of the country and also provide banking facilities in the absence of banks in the rural areas. They come under the Department of Posts which is a part of the Ministry of Communications and Information Technology

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under the Government of India. The apex body of the department is the Postal Service Board. The board consists of a chairman and six members. The six Members of the Board hold portfolios of Personnel, Operations, Technology, Postal Life Insurance, Human Resource Development (HRD) and Planning functions. The Joint Secretary and Financial Advisor to the Board is also a permanent invitee to the Board.

India has been divided into 22 postal circles, each circle headed by a Chief Postmaster General. Each Circle is further divided into regions comprising field units, called Divisions, headed by a Postmaster General. Other functional units like Circle Stamp Depots, Postal Stores Depots and Mail Motor Service may exist in the Circles and Regions. Besides the 22 circles, there is a special Circle called the Base Circle to cater to the postal services of the Armed Forces of India. The Base Circle is headed by an Additional Director General, Army Postal Service holding the rank of a Major General. The modern postal service in India is more than 150 years old. In 1854, the Post Office in the Province of Sindh, (then in British India), made postal history, when India became the first country to issue postage stamps. In October 1854, all the post offices of Indian sub continent came under centralized control. In the same year Railway Mail Service was established and India had a network of 701 post offices across the continent. In 1911, India achieved another "first" when a biplane from Allahabad to Naini flew with 6500 pieces of mail. The flight was the first official Air Mail in the world. After independence, the Indian government broadened the vision of the postal system to reach the entire population of the country. Today Indian postal system has a reach that ranges from arid deserts of Rajasthan and Kutch to the icy heights of Laddakh. India has the highest post office in the world in Sikkim at a height of 15,500feet (postal code - 172114). Indian postal service provide many facilities like - general or registered mail, parcel post, speed post, express post, e post and special courier service known as EMS-speed post. They also offer a number of post office savings schemes like National Savings Certificate, Kisan Vikas Patra, Recurring Deposits and Term Deposits.

Post Office has long served as the backbone of communication and small deposits. For more than 150 years the department of Posts has played a pivotal role in facilitating communication throughout the nation thereby aiding in socio-economic development of the country.

Post Offices offer varied services. Their work is not just restricted to delivering mails. They accept deposits, provide retail services like sale of forms, bill collection etc, provide savings schemes, life insurance cover etc.

With a network of more than 1.5 lakh post offices across the country, India Post offers various Post Office Saving Schemes. These are risk free investment options that are safe and secured and provide you with capital gains without Tax Deduction at Source (No TDS).

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Various investment opportunities are available for an individual to his savings and he can choose the appropriate investment schemes, which suit his needs. There are different types of opportunities provided by many financial institutions like commercial banks, co-operative banks, post office savings banks, life insurance corporation public limited company. Of all the above mentioned institutions, Post Office Savings Bank play vital role. It provides numerous benefits to the investors. Post office saving bank is the largest savings institutions in the country. With a view to mobilizing savings of people with relatively small income and circulating in them a spirit of thrift and savings, the Central Government has endeavored to make the National Savings Movement popular by offering high returns than those given by scheduled banks. There are a number of attractive schemes, well designed to meet the individual requirements of different investors. Tax saving features of those schemes attracts the higher income groups more than small savers.

The investment avenues provided by the post offices are generally marketable as they are saving media. The major instruments of post office schemes enjoy tax benefits such as exemption of investment contribution or interest income from tax or both up to certain limits.

These savings schemes come at attractive rates with nomination facility and are transferable to any Post Office across India. Let us have a quick glance at various post office savings schemes. The Government of India had framed various saving schemes with the objective to provide fully secured and attractive investment opportunity to the public. It’s another main purpose is to mobilize huge resource to the government exchequer for the development of the country. These post office schemes are attractive to the public as they offer good tax benefit and higher returns. These schemes were framed under the Government Savings Bank Act, 1873, Government Savings Certificates Act, 1959 and · Public Provident Fund Act, 1968.

The main financial services offered by the Department of Posts are the Post Office Savings Bank. It is the largest and oldest banking service institution in the country. The Department of Posts operates the Post Office Savings Scheme function on behalf of the Ministry of Finance, Government of India. Under this scheme, more than 20.50 crores savings account are operated. These accounts are operated through more than 1, 54,000 post offices across the country

Types of Post Office Saving Schemes

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Post Office Monthly Income Scheme- Post Office Monthly Income Account is meant for those investors who want to invest a lump sum and earn interest on monthly basis for their living.

Public Provident Fund -Public Provident Fund, popularly known as PPF, is a savings cum tax saving instrument. It also serves as a retirement planning tool for many of those who do not have any structured pension plan covering them.

National Savings Certificate -National Savings Certificate, popularly known as NSC, is a time-tested tax saving instrument that combines adequate returns with high safe.

Post Office Saving Account -Post office saving account is similar to a savings account in a bank. It is a safe instrument to park those funds, which you might need to liquidate fully or partially at very short notice.

Post office time deposit -Post office time deposit account is just like the bank fixed deposit account. These time deposits are meant for those investors who want to deposit a lump sum for a fixed period.

Senior Citizens Savings Scheme -Offers fixed investment option for senior citizens for a period of five years, which can be extended, at a higher rate of interest that are paid in quarterly installments.

Recurring deposit account -Recurring deposit account is a systematic way of saving money. The scheme is meant for those investors who want to deposit a fixed amount regularly or periodical basis.

Review of literature

The views expressed by various authors have been reviewed in a broad sense so as to confine itself for reference.

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Dr.R.Ganapathi (2010) studied that various Small Saving Schemes were mainly meant to help the small investors and also those who are in high tax brackets. The study concluded that proper advertisements must be made for Post Office Savings Schemes, so that even a layman could know about these Schemes and deposits can be increased. They stated that investing their amount in Post Office deposits provides safety and security for the amount invested.

Preeti Singh (2002) stated that Post office schemes are generally like the Commercial Bank schemes. They have a saving account, a Recurring Deposit account, Time Deposit account which is also recurring in nature. The savings account operates in the same way as commercial Banks through cheques and there is no restriction on withdrawals.

Karthikeyan (2001) has conducted research on Small Investors' Perception on Post Office Saving Schemes and found that there was significant difference among the four age groups, in the level of awareness for Kisan Vikas Patra (KVP), National Savings Schemes (NSS), and Deposit Scheme for Retired Employees (DSRE), and the overall score confirmed that the level of awareness among investors in the old age group was higher than in those of the young age group. No difference was observed between male and female investors except for the NSS and KVP. Out of the factors analyzed, necessity of life and tax benefits was the two major ones that influence the investors both in semi-urban and urban areas. Majority (73.3 per cent) of investors of both semi-urban and urban areas were very much willing to invest in small savings schemes in future provided they have more for savings.

Gavini and Athma (1999) found that social considerations, tax benefits, and provision for old age were the reasons cited for saving in urban areas, whereas to provide for old age was the main reason in rural areas. Among the post office schemes, Indira Vikas Patra (IVP), KVP and Post Office Recurring Deposit Account (PORD) were the most popular, in both urban and rural areas.

Jayaraman (1987) has stated that instead of issuing special bonds for unearthing black money the Government of India can encourage investment of black money in various small savings schemes. He further stressed the need to draft the assistance of voluntary agencies at the school and college level for further mobilization of savings.

Arangasami (1992) has observed that more and more dependence on

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mobilization of resources through small savings will ensure and promote self-reliance. He concluded that the Central government should give proper assistance and encouragement to the small savings agencies, which will be useful not only in mobilization of funds but also for the economic development.

The study by Mukhi (1989) has revealed that NSC has been one of the most popular tax savings instruments in this country. He has stated those contractors and others who have to provide security while bidding for contracts finds it extremely convenient to buy NSC and pledge these to the appropriate authorities while earning 12 per cent per annum on the pledged securities. He also stated that the major attraction of NSC is its simplicity. Even the average investor does not have to scratch his head to understand the scheme.

Tamilkodi (1983) has stated that small savings schemes have a psychological appeal and it provides an opportunity for ordinary men, women, and even children to park their savings. It reaches a large number of people and covers a wide range of areas. She also suggested that efforts should be taken to simplify the procedure of small savings schemes to suit the needs of illiterate and socially downtrodden people. Further, she suggested an increase in the rate of interest of small savings schemes to meet the challenges of commercial banks.

Somasundaram (1998) has found that bank deposits and chit funds were the best known modes of savings among investors and the least known modes were Unit Trust of India (UTI) schemes and plantation schemes. Attitudes of investors were highly positive and showed their intention to save for better future. Nearly two-thirds of the investors were satisfied with their savings. Both income and expenses of a family influenced the level of satisfaction over savings. A large proportion of investors were concerned about their children's well-being. Among the dissatisfied investors, majority were of the opinion that cost of living was too high. The most common mode of investment was bank deposits. However, a shift was noticed from bank deposits to other forms of investment. Almost all the investors had invested in gold and silver. Among several parameters in investing, safety of money was considered to be the most important element. Next, the investors expected regular return from their investments.

Richa (2004) in her study argued that the Post office continues to be a major attraction for savers. Finance Ministry officials say that the attraction for the Post office deposit schemes stems from the higher interest rate they offer vis-à-vis what banks give.

Scher (2001) observed that in many countries Postal Savings and Giro remittances have long enabled provision of financial services to all segments of

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the population. Questionnaires were sent to the Ministers and Postal administrations of approximately 80 countries in July 1999. The review of experiences of Asian developing countries suggests many ways by which developing countries can help themselves to mobilize domestic savings and provide domestic financial services through postal savings and remittances and thereby provide financial services to those most likely to be excluded.

Amling Ferderic stated that investment is the employment of funds with aim of achieving additional income of growth in value. The essential quality of investment is that it involves “waiting” for a reward. There are a number of investment possibilities that prospective investors can think of.

Monograph stated that the different types of small saving include the national saving certificate, the post office saving bank deposits and the post office cash certificate. Individuals saving in the since they are a liquid as other deposits form of Post Office saving bank deposits should be treated on a par with other bank deposits

Investors Voice opines that post office investors belong to a separate class. It has been recognized that the post office savings schemes is the oldest in the country; are the safety investment avenues and hence attract those classes of investors like senior citizens house wives ,institutions trust etc. The post office savings schemes are relatively inflexible but those who do don`t care much of risk reward equation have traditionally been plumbing for the post office saving with the sole criterion of the security of investment.

National Council of Applied Economic Research (NCAER) (1961) 'Urban Saving Survey' noticed that irrespective of occupation followed and educational level and age attained, households in each group thought saving for the future was desirable. It was found that desire to make provision for emergencies were a very important motive for saving and importance was given next to 'saving for old age'. Among motives for saving, provision for emergencies, old age, and purchase of house occur with same frequencies in all occupational and educational groups. The proportion of households expressing a preference for financial assets increases with the level of education. The preference for financial assets, especially bank accounts and small savings, while rising markedly with education, does not seem to increase with income, except at the lowest end of income distribution. Thus, it would appear that efforts must be taken to popularize financial forms of savings particularly among the less educated members of upper-income group. Profitability seems to be the most important motive for determining saving preference. Safety is another significant consideration for most people and liquidity ranked third.

Securities and Exchange Board of India (SEBI) and NCAER

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(2000) 'Survey of Indian Investors' has reported that safety and liquidity were the primary considerations which determined the choice of an asset. Ranked by an ascending order of risk perception fixed deposit accounts in bank were considered very safe, followed by gold, units of UTI-US64, fixed deposits of non-government companies, mutual funds, equity shares, and debentures. Households' preference for instruments in which they commonly invested matched the risk perception. Bank deposits, which had an appeal across all income classes and tax-saving schemes, were preferred by middle-income and higher-income groups. There was a correlation between the income levels and investments of households in market-related securities.

Need for the Study

The Indian economy is growing significantly and has various investment options but the Government of India has provided the oldest investment option. Still, the Postal saving scheme had not gained much importance. The changing postal environment presents an enormous challenge for traditional postal businesses, but it also creates a vast array of new business options and opportunities. The study will be undertaken to analyze whether the Postal savings schemes have gained importance among the people or not. Against this backdrop, an attempt will be

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made to find out the investment pattern of the respondents of a rural area.

To know the customer perception in the post office saving scheme, it contains different type of customer’s satisfaction level, their expectations and interest. What kind of problems customers facing in post office. To know the customers age, annual income, gender, and scheme type, this is the need to this study.

The small saving schemes in India are framed by the Central Government under the Government Savings Bank Act, 1873 and Government Savings Certificates Act 1959 and the Public Provident Fund Act 1968. The two other schemes intended to strengthen the domestic savings are Deposit Scheme for Retiring Government Employees (1989) and Deposit Scheme for Retiring Employees of Public Sector Companies (1991). Apart from these schemes, there are also the contractual saving schemes, namely General Provident Fund (GPF), Employees Provident Fund (EPF), and Employees Pension System. All these schemes carry interest rates administered by the Central Government.

At present, the small saving schemes in operation include Post Office Savings Account, Post Office Recurring Deposits, Post Office Time Deposits, National Savings Certificate, KisanVikas Patra, Public Provident Fund, and Deposit Schemes for Retiring Government Employees and Employees of Public Sector Undertakings. The maturity period of the small saving schemes, currently in operation, varies from a very short period (saving deposits) to over fifteen years (PPF). Certain schemes such as Post Office Savings Account, Post Office Recurring Deposits, Post Office Monthly Income Scheme, and Post Office Time Deposits are similar to commercial bank deposit schemes. Schemes like National Savings Certificates and Kisan Vikas Patra have maturity of 6 to 7 years. For Public Provident Funds, the minimum initial maturity is 15 years while for National Savings Schemes it is 4 years. Interest rates on the small saving scheme are fixed by the Central Government from time to time. These were last revised on March 1, 2001. An attractive feature of small saving schemes is favorable tax treatment. While contributions to certain schemes carry tax concessions, returns on almost all schemes have some tax-exemptions.

Scope of Study

The study aims to create awareness among the investors’ about various post office deposits schemes. It helps working people to invest in various post office deposits schemes and the National Savings Organization (NSO) and the Post Offices to know the problems faced by investors in while investing in post office deposits schemes. On basis of the study, the Government can make suitable changes to promote the various post office savings schemes according to the respective needs of the investors.

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Hypothesis of the Study

Based on the above objectives, the following hypothesis will be postulated: 1. There is no significant association between sources of the awareness of Postal Investments and Rural savings.2. There is no significant association between Schemes of the awareness of postal investments and Rural Savings.3. There is no significant association between different type’s deposits of Postal Investments and Rural savings.4. There is no significant association between personal factors and source of awareness of postal savings schemes.5. There is no significant association between personal factors and media of advertisement about Postal Investment and Rural savings.6. The demographic factors of the respondents have no significant influence over their sources of awareness of various Post Office Deposits Schemes. 7. The demographic factors of the respondents have no significant influence over their opinion towards various Post Office Deposits Schemes. 8. The demographic factors of the respondents have no significant influence over the problem faced while investing in Post Office Deposits Scheme

OBJECTIVES OF THE STUDY

The overall objectives of the study are to analyze the investors’ attitude towards “POST OFFICE DEPOSITS SCHEMES”. The specific objectives are -

To understand the perception of investors in the post office saving schemes

To study about investors expectation from the post office schemes

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To find out the level of awareness of various schemes of Post office among the public.

To find out the purpose of investments in various schemes of post office.

To study the problem faced by depositors in depositing in Post Office Deposits Schemes.

To study the investors opinion regarding tax benefits and returns from Post Office Deposits Schemes.

To find out the sources of awareness by which public get aware about various schemes.

To study the relationship between the demographic factor and sources of awareness, opinion and problem faced regarding Post Office Deposits Schemes.

To know about the following schemes- Post Office Savings Account 5-YearPost Office Recurring Deposit Account Post Office Time Deposit Account Post Office Monthly Income Account 15-year Public Provident Fund Account Kisan Vikas Patra National Savings Certificate (VIII issue) Senior Citizens Savings Scheme

Research Methodology

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Small savings schemes are designed to provide safe & attractive investment options to the public and at the same time to mobilize resources for development.

The main financial services offered by the Department of Posts are the Post Office Savings Bank. It is the largest and oldest banking service institution in the country. The Department of Posts operates the Post Office Savings Scheme function on behalf of the Ministry of Finance, Government of India. Under this scheme, more than 20.50 corers savings account are operated. These accounts are operated through more than 1, 54,000 post offices across the country.

The Post offices provide a number of savings schemes like the Savings Account Schemes, Recurring Deposit Schemes, Time Deposit Schemes, Public Provident Fund Schemes, Monthly Income Schemes, National Savings Certificates, Kisan Vikas Patras, and Senior Citizens Savings Scheme. A brief of the various schemes is as follows:

SchemesInterest Rates

TenureInvestment

Denominations and limits

Salient Features

Post Office Savings Account

3.5% p.a. On individual and joint account

No specific or fix tenure

Min: Rs. 50 Max: Rs. 1 lakh for individual and 2 lakhs for joint account

Cheque facility available

5-YearPost Office Recurring Deposit Account

7.5% compounded quarterly

5 years. Can be renewed for another 5 years

Min: Rs. 10 per month or multiples of Rs. 5 Max: No limit

One withdrawal up to 50% of the balance is allowed after one year. Full maturity value allowed on R.D. 6 & 12 months advance deposits earn rebate.

Post Office Time Deposit Account

6.25% 1 year Min: Rs. 200 and its multiple thereof Max: No limit

Long-term accounts could be closed after 1 year for discounted interest.

6.50% 2 years7.25% 3 years7.50% 5 years

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Accounts could be closed after 6 months but before a year for no interest.

Post OfficeMonthlyIncome Account

8% p.a. 6 years

Min: Rs. 1500 per month or multiples of it.Max: Rs. 4.5 lakhs for individual account and Rs. 9 lakhs for joint account

Account if closed after 1 year but before 3 years will suffer a deduction of 2% of the deposit. Account if closed after 3 years will suffer a deduction of 1% of the deposit. On maturity, bonus of 5% on principal amount is admissible

15-year Public Provident Fund Account

8% p.a. compounded yearly

15 years tenure

Min: Rs. 500 in 1 year Max: Rs. 70000 in 1 year Deposits can be made in lump-sum or 12 installments

Withdrawal can be made every year after the 7th financial year. From the 3rd financial year, loan can be availed against PPF. No attachment under court decree order.

Kisan Vikas Patra

8.4% compounded yearly. Money doubles in 8 years and 7 months

--- No limits. Investment denominations available are of Rs. 100, Rs. 500, Rs. 1000, Rs. 5000, Rs. 10,000,

A single holder certificate can be purchased by an adult. A certificate can also be purchased

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in all Post Offices and Rs. 50,000 in all Head Post Offices.

jointly by two adults.

National Savings Certificate (VIII issue)

8% p.a. compounded half-yearly but payable after maturity

6 years

Min: Rs. 100. Also available in denominations of Rs. 100/-, 500/-, 1000/-, 5000 & Rs. 10,000/-. Max: no limit

A single holder certificate can be purchased by an adult.

Senior Citizens SavingsScheme

9% p.a. 5 years

Only 1 deposit allowed in multiple of Rs. 1000. Max is Rs. 15 lakhs

Age should be above 60 years or 55 years above if retired under superannuation. Account if closed after 1 year will suffer a deduction of 1.5% interest and after 2 years will suffer a deduction of 1% interest. TDS is made on interest if it exceeds Rs. 10000 p.a.

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ANALYSIS

Post Office Recurring Deposit Account (RDA)

A Post-Office Recurring Deposit Account (RDA) is a banking service offered by Department of post, Government of India at all post office counters in the country. The scheme is meant for investors who want to deposit a fixed amount every month, in order to get a lump sum after five years. The scheme, a systematic way for long term savings, is one of the best investment option for the low income groups.

Features:

The minimum investment in a post-office RDA is Rs 10 and then in multiples of Rs. 5/- for a period of 5 years. There is no prescribed upper limit on your investment.

The deposit shall be paid as monthly installments and each subsequent monthly installment shall be made before the end of the calendar month and shall be equal to the first deposit. In case of default in payment, a default fee is chargeable for delayed deposit at 0.20 Paisa per month of delay, for Rs.10 Denomination. After more than four defaults, the account shall be treated as discontinued in case the account is not revived within two months from the fifth default.

For Advance deposits for 6 months or 12 months, a rebate is allowed at the prescribed rate (For Rs 10 denomination:- Rs.1/- for 6 advance deposits, Rs.4/- for 12 advance deposits.

One withdrawal is allowed after one year of opening a post-office RDA on meeting certain conditions. You can withdraw up to half the balance lying to your credit at an interest charged at 15%. The withdrawal or the loan may be repaid in one lump or in equal monthly installments.

Premature closure is allowed on completion of three years from the date of opening and in such case, interest is payable as per the rate applicable for the Post Office Savings Bank Account.

After maturity of the account, it can be continued for a further period of 5 years with or without further deposits. During this extended period, the account can be closed at any time.

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Returns:The post-office recurring deposits offer a fixed rate of interest, currently at 7.5 per cent per annual compounded quarterly.

Monthly Investment

Total Investment(60months)

Money returned on Maturity (after 60 months)

10 600 728.90

20 1,200 1457.80

50 3,000 3644.50

100 6,000 7289.00

500 30,000 36445.00

1000 60,000 72890.00

1375 82,500 100224.00

5000 3,00,000 364450.00

Advantages:

The post office offers a fixed rate of interest unlike banks which constantly change their recurring deposit interest rates depending on their demand supply position. As the post office is a department of the government of India, it is a safe investment. The principal amount in the Recurring Deposit Account is assured. Moreover Interest earned on this account is exempted from tax as per Section 80L of Income Tax Act.

How to Start Post office RDA:

A post-office RDA can be opened at any post office in the country by filling up the appropriate forms. The account can be opened by an individual adult as a single person account, two adults in a joint mode, or by a guardian on behalf of the minor who has attained the age of 10 years in his own name. A pass book is

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issued at the time of opening the account. If there is a loss, theft or the passbook is mutilated, a duplicate is issued on a charge. The deposit can be made personally at the particular post office every month or can be made through an appointed agent, who would collect the money from you and enter the same in your passbook.

Post Office Time Deposit Scheme

Post Office Time Deposit Scheme is a scheme offered by the department of Post, Government of India. This is a type of fixed deposit and is offered at all post offices. As this scheme is handled directly by the Government of India through Post Office network, it can be considered a very safe and secure method of investment. The amount grows at a predetermined rate at no risk.

This scheme is best for those people who want to invest their lump-sum money for a fixed period of time. At the maturity of the deposit, the depositor gets the total amount, (principal + interest). The rate of interest on investment is high in this scheme ranging from 6.25% to 7.50%, depending on the term of the deposit. The interest is calculated on quarterly basis but is payable annually.

The various rates of interest received in a Post Office Time Deposit are:

Period of Deposit

Rate of interest per annum

1 Year 6.25%

2 years 6.50%

3 years 7.25%

5 years 7.50%

Opening a Post Office Time Deposit Account

The account can be opened at any of the post offices across India. It can be opened for a period of 1 year, 2 years, 3 years or 5 years. On opening the account, you will receive an account statement with the deposit amount details and duration of the account. Once the account matures, the depositor receives the total amount.

The minimum amount required to be deposited in the Post Office Time Deposit is Rs. 200/- and multiples of it. There is no maximum limit. Nomination facility is available under this scheme. The following persons can open a Post Office Time Deposit Account:

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A single person can open this account. Two adults can open a joint account. An adult can open an account on behalf of a minor or a person of unsound

mind. Authority of Provident Fund, Superannuation Fund or Gratuity Fund can

open group accounts. Fund controlling authority of Sanchayika can open an account. Local authority can open a public account The Treasurer of Charitable Endowments for India, Trust, Regimental

Fund & Welfare Fund could open institutional accounts A cooperative society/bank or scheduled bank can open an account on

behalf of its members, employees or clients. Gazette officer can open an account in his official capacity.

Withdrawal

No withdrawal is permitted for 6 months after the deposit. In case the depositor closes the account after 6 months, but before 1 year, then he will get back the principal amount without any interest. However, in some cases, some interest could be received depending upon the time when it was deposited. In case the duration of deposit is 2, 3 or 5 years and the depositor closes the account after 1 year, then the depositor will get 2% less than the interest rate applicable to the period for which the deposit was initially made.

Tax Benefits

The interest received on a Post Office Time Deposit is tax-free under section 80L of the Income Tax Act. Also, the amount invested in a 5-year Post Office Time Deposit Account is eligible for deduction under section 80C of the Income Tax Act. The investment in Post Office Time Deposit along with other investments under Public Provident Fund, LIC, National Savings Certificate, ULIP etc are eligible for deduction up to a maximum of Rs. 1,00,000/- under section 80C. In case of joint account under this deposit, the deduction is allowed to the first holder.

Post Office Monthly Income Scheme

The post-office monthly income scheme (MIS) provides for monthly payment of interest income to investors. It is meant for investors who want to invest a sum amount initially and earn interest on a monthly basis for their livelihood. The MIS is not suitable for an increase in your investment. It is meant to provide a source of regular income on a long term basis. The scheme is, therefore, more beneficial for retired persons.

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Features:

Only one deposit is available in an account. Only individuals can open the account; either single or joint.( two or

three). Interest rounded off to nearest rupee i.e., 50 paisa and above will be

rounded off to next rupee. The minimum investment in a Post-Office MIS is Rs 1,000 for both single

and joint accounts. The maximum investment for a single account is Rs 3 lakh and Rs 6 lakh

for a joint account. The duration of MIS is six years.

Returns:The post-office MIS gives a return of 8% plus a bonus of 10 per cent on maturity. However, this 10 per cent bonus is not available in case of premature withdrawals. The minimum investment in a Post-Office MIS is Rs 1,000 for both single and joint accounts.

Deposit Rs

Monthly Interest

Amount returned on maturity

5,000 33 5,500

10,000 66 11,000

50,000 333 55,000

1,00,000 667 1,10,000

2,00,000 1,333 2,20,000

3,00,000 2,000 3,30,000

6,00,000 4,000 6,60,000

Advantages:

Premature closure of the account is permitted any time after the expiry of a period of one year of opening the account. Deduction of an amount equal to 5 per cent of the deposit is to be made when the account is prematurely closed. Investors can withdraw money before three years, but a discount of 5%. Closing of account after three years will not have any deductions. Monthly interest can be

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automatically credited to savings account provided both the accounts standing at the same post office. The interest income accruing from a post-office MIS is exempt from tax under Section 80L of the Income Tax Act, 1961. Moreover, no TDS is deductible on the interest income. The balance is exempt from Wealth Tax.

How to Open:

You can buy a post office MIS at any post-office in India. When you open an MIS, you will get a certificate issued by the post office. In addition, the investor is provided with a passbook to record his transactions against his MIS.

Kisan Vikas Patra (KVP)

Kisan Vikas Patra (KVP) doubles your money in 7 years and 3 months with the advantage of premature withdrawal. KVP is sold through all Head Post Offices and other authorized post offices throughout India. The rate of return is 9.75 per cent, compounded annually.

KVP accumulates money at a fixed rate, and your money doubles in 7 years and 3 months. But KVP is not meant for regular income. It is for those looking for a safe avenue of investment without the pressing need for a regular source of income.

Features:

The minimum investment in KVP is Rs 100. Certificates are available in denominations of Rs 100, Rs 500, Rs 1,000, Rs 5,000, Rs 10,000 and Rs 50,000. The denomination of Rs 50,000 is sold through head post offices only. There is no limit on holding of these certificates. Any number of certificates can be purchased. A KVP is sold at face value; the maturity value is printed on the Certificate.

It is a good option if you are looking for hassle-free investment as it assures a certain sum of money at the expiry of the duration of your investment.

With a fixed rate of return, KVP does not provide safeguards against the perils of high inflation rates.

Depending on whether the finance company or the bank from where you are raising the loan accepts it or not. Some banks accept it for raising house loans.

Income is assured at the prescribed rate of interest. As mentioned, this is a risk-free investment channel as the KVP comes with the backing of the Government of India.

Since the KVP has the backing of the Government of India and is, therefore, extremely safe, it does not require any commercial rating.

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KVP is not a bearer certificate, and is not easily transferable. Permission of the post master is required for any transfer. These cannot be traded in the secondary market.

KVP cannot be traded in the secondary market and, hence, the question of its market value does not arise.

KVP is held physically in the form of certificates that are issued to the investors by the post office. The option of holding KVP in demat form is not available.

Although no TDS is applicable on the interest income from KVP, there are no tax incentives as per the provisions of the Income Tax Act, 1961.

Maturity on providing proper identity and by simple discharge of the certificate on the reverse.

Returns:

KVP Scheme doubles money in seven years and three months.

What is the liquidity of KVP?

If the premature encashment takes place within a period of one year from the date of purchase of the certificate, only the face value of the certificate shall be payable. No interest is payable in this case.

After the expiry of one year, but before two years and six months from the date of the issue of the certificate, the face value of the certificate together with simple interest at the specified rate for the completed months for which the certificate has been held, shall be payable.

If a certificate is encashed any time after expiry of two-and-a-half years, the amount payable is as specified by the government from time to time.

National Saving Certificates (NSC)

National Savings Certificate, popularly known as NSC is an assured investment scheme. It is a time-tested instrument providing double benefits; one is tax savings and the other is adequate returns with high safety. They facilitate long-term safe saving options for the investor. NSCs are a good investment option for salaried class people, businessmen as well as government employees. When you buy a NSC for a particular value, the interest compounded is returned along with the principal amount only after the maturity. It is a cumulative scheme wherein the interest is reinvested. The duration for an NSC is 6 years. Owing to it being time-bound, NSCs have low liquidity.

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NSCs are available at all post offices across the country. They are issued by the Department of Post. Many middle class people in the country buy NSCs for saving tax as well as to earn decent return on their investment. Though NSC has much competition from other investment options like shares and mutual funds, yet it is highly popular owing to its respectable returns which are government guaranteed as well as tax-exempt.

Interest and Returns

NSC attracts interest rate of 8% per annum compounded half-yearly. Because of compounding, the effective rate of interest comes to 8.16%. NSCs are under a cumulative scheme and the entire interest earned every year is reinvested. It is paid along with the principal amount only after the maturity of the certificate. For example, if a person invests Rs. 10,000 in NSC today, he will receive Rs. 16,010 after 6 years.

Features of National Savings Certificate

Pre-mature encashment is not permissible. Reinvestment of the annual interest earned. Post office savings account interest benefit for 2 years, if amount is not

drawn at maturity. Reinvestment of amount after maturity is allowed. Loan can be availed against the security of the certificate. Nomination facility available. Transferable from one Post office to another. Transferable from one person to another. Duplicate Certificate issued in case the certificate is lost, stolen, mutilated

or defaced.

Types of NSCs and Eligibility

Any adult individual can buy NSC for himself or on behalf of a minor. Two adults can jointly buy the certificate. Even a trust can buy NSCs. There are basically 3 types of certificates that can be bought by individuals:

Single Holder Type Certificate: This certificate can be bought by an individual in his name or on behalf of minor, or a trust.

Joint 'A' Type Certificate: this certificate is issued to 2 adults jointly and is payable to both holders jointly or to the survivor.

Joint 'B' Type Certificate: This certificate is issued to 2 adults jointly payable and is payable to either of the holders or to the survivor.

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How and Where to Apply

NSCs can be purchased at authorized post offices and all head post offices across the country. A person can apply for an NSC in a prescribed manner at any of the post offices. NSC can be applied for in person or through an agent. Agents for this purpose are active in every nook and corner of the country. NSCs are available in denominations of Rs. 100, Rs 500, Rs. 1000, Rs. 5000, & Rs. 10,000. Minimum purchase is for Rs. 100 and there is no maximum limit to the purchase of NSCs. A person can invest as much as his budget allows. Payment for NSCs can be made in cash or by a locally executed cheque or order or through a demand draft in favor of postmaster. A duly signed withdrawal form along with passbook to enable withdrawal from savings account of post office could also be used as a payment mode. Also payment can be made by surrendering a matured old certificate discharged as; Received payment through issue of fresh certificate vides application attached.

Encashment

The NSC can be encashed at any registered or authorized post office. The authority needs to be satisfied with the identity of the person presenting the certificate. On receipt of the amount, the receiver signs the back of the certificate as a proof of receipt. The NSCs can also be encashed through banks or by transferring them to the desired post office.

If the certificate is purchased on behalf of a minor, and at the time of maturity the minor has attained the age of adult, then that recent adult needs to sign the certificate. The signature needs to be attested by the person who bought the certificate in his behalf or by the postmaster.

The maturity period of NSC is 6 years. Generally pre-mature encashment is not allowed but in cases like death of the holder, forfeiture by the nominee or court’s order, the NSC can be encashed prematurely.

Tax benefits

Deposits in NSCs up to Rs. 1 lakh can be availed as deduction under Section 80C of the Income Tax Act. The annual interest earned is deemed to be reinvested and thus qualifies for the deduction under Section 80C.

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Post Office Senior Citizen Scheme

A new savings scheme called ‘Senior Citizens Savings Scheme’ has been notified with effect from August 2, 2004. The Scheme is for the benefit of senior citizens and maturity period of the deposit will be five years, extendable by another three years. Initially the scheme will be available through designated post offices through out the country.

Features:

The minimum investment is 1000Rs and in multiples of Rs.1000 subject to a maximum of Rs.15 lakh.

Citizens of 60 years of age and above are eligible to invest. Single or joint account (with spouse only) can be opened. Citizens who have retired under a voluntary or a special voluntary retirement scheme and have attained the age of 55 years are also eligible, subject to specified conditions.

The deposit will carry an interest of 9% per annum (taxable). The maturity period of the deposit will be five years, extendable by another three years.

Premature withdrawal after a period of one year will be allowed, subject to some deductions.

The investments in the scheme will be non-tradable and non-transferable. However, nomination facility will be available.

Non-Resident Indians and Hindu Undivided Families are not eligible to invest in the scheme.

Returns: The deposit will carry an interest of 9% per annum (taxable).

Advantages:

This Scheme is most beneficial to Senior citizens and provides a high rate of interest as compared to bank interest of 4.5- 4.75%. Although the interest on the deposit is taxable, the deposits themselves are tax free. As the post office is a department of the government of India, it is a safe investment. The principal amount is assured.

How to Start Post office Senior Citizens account:

A Senior Citizen Account can be opened through any designated post office through out the country. The account can be opened by any individual 60 years of age and above either individually or jointly (with spouse only).

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FINDINGS

Total No. of post office on DATED 13.03.2013

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Sl. No

Name of Postal Circle

Name of State  Total No.

of Post

offices

  No. of Post

offices offering

POSB facilities

1 ANDHRA PRADESH ANDHRA PRADESH 15973 15973

2 ASSAM ASSAM 4013 4013

3 BIHAR BIHAR 8935 8933

4 CHATTISGARH CHATTISGARH 3144 3143

5 DELHI DELHI 545 542

6 GUJARAT GUJARAT 8979 8976

7 HARYANA HARYANA 2261 2261

8 HIMACHAL PRADESH HIMACHAL PRADESH 2778 2778

9 JAMMU & KASHMIR JAMMU & KASHMIR 1691 1691

10 JHARKHAND JHARKHAND 3096 3096

11 KARNATAKA KARNATAKA 9679 9679

12 KERALA KERALA 5067 5066

13 MADHYA PRADESH MADHYA PRADESH 8314 8314

14 MAHARASHTRA MAHARASHTRA 12566 12552

GOA 258 258

15 NORTH EAST TRIPURA 708 708

NAGALAND 328 328

MIZORAM 389 389

ARUNACHAL PRADESH 299 299

MEGHALAYA 490 490

MANIPUR 698 698

16 ORISSA ORISSA 8163 8163

17 PUNJAB PUNJAB 4017 4017

18 RAJASTHAN RAJASTHAN 10324 10323

19 TAMIL NADU TAMIL NADU 10996 10996

20 UTTAR PRADESH UTTAR PRADESH 17726 17726

21 UTTARAKHAND UTTARAKHAND 2719 2708

22 WEST BENGAL WEST BENGAL 8853 8853

India has been divided into 22 postal circles, each circle headed by a chief postmaster general. Each circle is divided into regions, headed by a postmaster general and comprising field units known as divisions (headed by SSPOs and SPOs). These divisions are further divided into subdivisions, headed by ASPs and IPSs. Other functional units (such as circle stamp depots, postal store depots and mail motor service) may exist in the circles and regions. In addition to the 22 circles, there is a base circle to provide postal services to the Armed Forces of India. The base circle is headed by a Director General, Army Postal Service (with a rank of major general).

The highest post office in the world is in Hikkim, Himachal Pradesh, India at a height of 15,500 ft (4,700 m) (postal code 172114).

Gross Collections under Various Saving Schemes

(Rs.crore)Schemes 2009-10 2010-11 2011-12

Post Office Savings Account

7,963 10,343 10,597

Post Office Recurring Deposits

4,580 5,532 6,778

Post Office Monthly Income

Scheme

2,318 4,775 7,867

Post Office Time Deposits (1 Year)

505 738 872

Post Office Time Deposits (2 Year)

96 137 173

Post Office Time Deposits (3 Year)

52 94 54

Post Office Time Deposits (5 Year)

519 664 848

National Savings Scheme 1992

101 85 73

National Savings Certificate VIII

Issue

5,124 5,103 5,732

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Kisan Vikas Patra 9,650 15,712 17,543

Public Provident Fund

4,634 5,617 7,221

Deposit Scheme for Retiring Employees

138 78 108

Relief Bonds (5-year)

1,071 - 6,214

1. Post-Office Saving Account:

The post-office savings account can be opened minimum of Rs. 50 and maximum of Rs. 1, 00,000 by an individual. However, for joint account the upper limit is Rs. 2, 00,000/-, but there is no limit for group, institutional or official capacity account.

Withdrawal from the account is by cheques and there is no restriction on withdrawals, unlike in a commercial bank. Accounts having minimum balance of Rs. 200 during April- September and October-March qualify for six monthly prize draws in the next January and July.

The interest is tax free and is 1/2 per cent more than that offered on savings bank account by commercial banks.

2. Post Office Recurring Deposit:

The scheme covers free life insurance cover after receiving contributions for 24 months on account of denomination of Rs. 5, Rs. 10, Rs. 15 or Rs. 20.

In the event of death of the depositor after a minimum period of two years, from the date of opening the account, the heir or nominee will get the full maturity value of the account provided the depositor’s age was between 8 and 53 years and there have been no withdrawals or defaults during the first two years and the account remains current at the time of death.

The benefit of cover is not available for an extended period of deposit beyond five years.

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The post-office recurring deposits offers a rate of interest, currently at 8.4 per cent per annum compounded quarterly.

3. Post Office Time Deposit:

A Time Deposit is an investment option that pays annual interest rates compounded quarterly, and is available through post-offices across the country. They are suitable for capital appreciation in the sense that money grows at a pre-determined rate.

Unlike certain other investment options, where returns are commensurate with the risks, the rate of growth is also high; Time Deposits return a lower, but safer, growth in investment.

Therefore, Time Deposits are one of the better ways to get a relatively high interest rate for savings. The only condition is that they are bound for some specific period of time. The investors can borrow against a Time Deposit. The balance in account can be pledged as a security for a loan.

Example:-

If a depositor of 5-year TD account opened on 1.6.1983 desire to close the account or withdraw a particular deposit after one year or two years or three years or four years, he will be entitled to the interest at the following rates on basis of rates given in Table F of Rule 7 of POTD Rules, 1981.

After one year = 9 – 2 = 7%After two years = 9 ¾ - 2 = 7 ¾%

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Monthly Investment Total Investment (60 Months)

Money returned on Maturity (after

60 months)

10501001000150030005000

600300060006000090000180000300000

746.513,7337,46574,651

1,11,9772,23,9533,73,255

After three years = 10 ½ -2 = 8 ½%After four years = 10 1/2 – 2 = 8 ½%

Since there is no separate Time Deposit account for four years, the rate of interest admissible for 3-year TD account will apply in case a 5-year TD account is closed after four years.

4. Post Office Monthly Income Scheme:

The post-office monthly income scheme (MIS) provides for monthly payment of interest income to investors. It is meant for investors who want to invest a lump-sum amount initially and earn interest on a monthly basis for their livelihood. The scheme is, therefore, a boon for retired persons.

For example: Ajay invests Rs 4.5 lacs in the post office monthly income scheme. His

interest per year is Rs 36,000 @8%; hence he gets Rs 3,000 per month as

income. If you do not withdraw the amount for some month, it would not

earn any interest and just lie in the account.

This post office saving scheme does not come under sec 80C so there is no

tax-exemption for the amount you invest in this, and interest income is

taxable, but there is no TDS cut in this scheme. Read 7 tax saving tips you

can deposit the money in the POMIS with cash, demand draft or local

cheque. Once you open a monthly income scheme account, you will be

issued a scheme certificate and a passbook to record the transactions against

the post office MIS scheme.  The maturity period of this scheme is 6 years.

You will also be eligible for a 5% bonus if you retain your scheme for 6

years, so eventually your overall return including this bonus can turn out to

be around 8.9%.  There is a limit on the amount you can invest in POMIS.

It’s limited to Rs 4.5 lacs for a single account and 9 lacs for a joint account.

You can have any number of accounts, but within the overall upper limit. 

There is no compulsion to take your money out after maturity, you can

leave the money in the account, but then it would earn the interest equal to

saving bank account for next 2 years only.

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5. National Savings Scheme:

In addition to the above post-office deposit scheme, various National Savings Schemes have been introduced from time to time to mobilize public savings for financing the economic development plans.

These schemes have been very popular in view of tax benefits enjoyed by them. Unlike commercial bank schemes, these schemes are uniform all over the country.

Again, the interest is paid on completed years no payment being admissible for broken periods of a year. Premature encashment is discouraged. Some of the schemes are offered through the State Bank of India /nationalized banks. The national savings certificates sold through S.B.I are designated as “Bank Series”.

Unlike commercial banks schemes, nomination facility is available for all the National Savings Schemes. Accounts can also be transferred from one Post Office to another. Further, many of these savings certificates can be pledged as security, towards loan guarantee.

6. Kisan Vikas Patras:

Such instruments are available at post offices and can be obtained in denominations of Rs. 1000, 5000 and Rs. 10,000. The maturity period here is 5/12 years but premature: encashment is possible. The interest payable on Kisan Vikas Patras is compounded annually \ but is taxable.

7. Indira Vikas Patras:

These instruments are available at post offices and can be purchased by any person. Minimum investment in Indira Vikas Patras is Rs. 100 and there is no maximum limit.

These are available in the maturity denominations of Rs. 200, 500, 1000 and Rs. 5000 an the investor has to pay half the face value. The initial amount is doubled in 5 years and these: patras cannot be encased premature.

The interest on Indira Vikas Patras is compounded annually, is payable on maturity only and is taxable. These instruments are like bearer-bonds and hence have to be carefully preserved.

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8. 15 Years Public Provident Fund Account:

Under this scheme, deposits can be made in lump sum or in 12 installments, minimum of Rs. 500/- and maximum of Rs. 70,000 in a financial year. These deposits qualify for income tax rebate under Sec. 88-of I.T. Act. Withdrawal is permissible every year from 7th financial year; loan facility is available from 3rd financial year.

9. Deposit Scheme for Retiring Govt. Employees 1988:

This scheme permits only one account which can be opened by retired central/state Govt. employee in its own name or jointly with the response. The account can be opened within three months from the date of receiving the retirements benefits with a minimum of Rs. 1000/- and in multiple thereof can be withdrawn after the expiry of 3 years from the date of deposit.

Only one withdrawal in multiples of Rs. 1000/- can be made in a calendar year. Premature encashment can be made after one year from the date of deposit but before the expiry of 3 years in which case the interest on the amount so

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withdrawn will be payable from the date of deposit up to the date of withdrawal. The excess interest paid will be adjusted at the time of such withdrawal.

10. Deposit Scheme for Retiring Employees of Public Sector Companies, 1991:To provide the benefits to the retiring employees of public sector companies, the deposit scheme for retiring govt. employees-1989 was introduced in 1991 for the public sector companies retiring employees.

There are different kinds of Small Savings Schemes suitable for various segments of the population.

The Government of India have reduced the rate of interest for many of the Small Savings Schemes w.e.f. 01.04.2013 as follows: 

S.No.

Scheme  Rate of Interestw.e.f.  01.04.2012

Rate of Interestw.e.f.  01.04.2013

1. Savings Deposit 4.0 % 4.0%2. 1year Time Deposit 8.2 % 8.2%

3. 2year Time Deposit 8.3 % 8.2%4. 3year Time Deposit 8.4 % 8.3%5. 5year Time Deposit 8.5 % 8.4%6.  5year Recurring Deposit 8.4 % 8.3%7. 5year SCSS 9.3 % 9.2%8. 5year MIS 8.5 % 8.4%9. 5year NSC 8.6 % 8.5%10. 10year NSC 8.9 % 8.8%11. PPF 8.8 % 8.7%*    - NSS -92 Scheme was withdrawn by the G.O.I.  w.e.f 01.11.2002 12. NSCIX ISSUE(10yrs)The SCSS introduced w.e.f. 1-7-2004

MONTHLY SAVINGS OPTION:

PORDREGULAR INCOME TAX BENEFIT SCHEMES:

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SCHEMES:POMIS, SCSS

  NSC/ PPF

  OTHER SCHEMES:POTD /POSA

Some Special Advantages of Small Savings Schemes

Most of the Schemes have facilities for nomination and in case of death of depositor his / her nominee (s) can easily withdraw the deposits with interest.

Certificate / Pass Book can be transferred to any other Post Office

Deposits can be made through Government appointed authorized male / female agent, who accept money / cheque / drafts against proper receipt.

 Pay Roll Savings Scheme 

Under this scheme, any monthly salaried person can voluntarily authorize his appointing authority or employer to deduct monthly contributions from his salary and to remit into anyone of the savings schemes like Post Office Recurring Deposit, Post Office Time Deposit, National Savings Certificate (VIII issue) and Public Provident Fund Scheme. The group leader appointed in each organization for collection purpose is paid by the PO which can be deducted at commission for his service who implements the scheme in the respective concern. 

Small saving instruments form the backbone of the savings mobilized by the Government of India. They represent the safest instruments and therefore most popular among all instruments. The advantages of small saving schemes are that they are government sponsored, have assured returns, are easy to understand for small investors, have tax benefits and have some liquidity.

Some of these schemes are Kisan Vikas Patra, Post Office Monthly Income Scheme,15 Years Public Provident Fund Scheme, Post Office Time Deposit Scheme, 5-Years Post Office Recurring Deposit Scheme, Post Office saving Scheme, National Saving Certificate(VIII Issue), Senior Citizen scheme, National Savings Scheme etc.

The Kisan Vikas Patra is an entirely safe instrument simple and easy to understand and invest. The minimum investment limit is Rs.500/- and no maximum limit. The rate of interest 8.40% compounded annually, otherwise the yearly rate of interest is 8.25%

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The post-office monthly income scheme(MIS) provides for monthly payment of interest income to investores.It is meant for investors who want to invest a sum amount initially and earn interest on a monthly basis for their livelihood.

The Public Provident Fund Scheme is a statutory scheme of the Central Government of India.The minimum deposit is Rs.500/- and maximum is Rs.70,000/- in a financial year.One deposit with a minimum amount of Rs.500/- is mandatory in eachg financial year.A Post-Office Time Deposit Account(RDA) is a banking service similar to a Bank Fixed Deposit offered by by Department of post,Government of India at all post office counters in the country.

National Savings Certificate (VIII Issue) have minimum invetment limit as Rs.500/- and no maximum limit. The certificate can be pledged as security against a loan to banks/Government Institutions. The Certificates are encashable at any Post Office in India before maturity by way of transfer to desired post office.

A new savings scheme called ‘Senior Citizens Savings Scheme’ has been notified with effect from Agust 2,2004. The Scheme is for benefit of senior citizens and maturity period of the deposit will be five years, extendable by another three years. The minimum investment is Rs.1000/- and in multiples of Rs.1000 subject to a maximum of Rs.15 lakh.

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Post Office Savings Bank

Savings Scheme

No. of Accounts

Balance in Rs.

%

Monthly Income Scheme (MIS) 74,372,853 1,795,033,300,000 32%

Kisan Vikas Patra (KVP) 70,67,530 1,663,301,400,000 30%

Recurring Deposit (RD) 24,737,525 650,733,400,000 12%

National Savings Certificate VIII

(NSC) 20,679,376 553,091,700,000 10%

Time Deposit (TD) 7,809,780 262,639,800,000 4.3%

Public Provident Fund (PPF) 7,809,780 234,010,400,000 4.3%

Savings Account7,046,881 226,894,900,000 4.0%

Senior Citizens Savings Scheme

(SCSS) 5,014,296 206,508,700,000 3.4%

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BIBLIOGRAPHY

BOOKS

1) POST OFFICE SERVICE BOOK VOLUME-III 2) Rural Marketing 3) Security Analysis & Portfolio Mgmt

MAGAZINES

1) DALAL STREET2) BUSINESS STANDARD3) BUSINESS TODAY

THROUGH INTERNET

1) www.indiapost.gov.in/posb.aspx2) www.thehindubusinessline.com/... post - office - savings - scheme 3) www.aarthashastra.com

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