Important Facts for Bank PO / RBI Exams - Post Office Saving Schemes

Post Office Saving Schemes:

Kisan Vikas Patra (KVP):

• Rate Of Interest : 7.6%
• Minimum Deposit : INR 1000/- 
• Maximum Deposit : No limit
• Tax Benefit : No
• Maturity Period: 113 Months.
• Launched in 1988, closed in 2011. Re-launched in 2014.

(Based on recommendation from Shayamla Gopinath, Govt. decided to close KVP in 2011. )

•  Certificate can be purchased by an adult for himself or on behalf of a minor or by two adults.
• Certificate can be en cashed after 2 & 1/2 years from the date of issue.

Sukanya Samriddhi Account:

Sukanya Samriddhi Account (literally Girl Child Prosperity Account) is a Government of India backed saving scheme targeted at the parents of girl children. The scheme encourages parents to build a fund for the future education and marriage expenses for their female child. 

• Rate Of Interest : 8.4%
• Minimum Deposit : INR 1000/- 
• Maximum Deposit : INR. 1,50,000/- in a financial year
• Tax Benefit : Yes
• Maturity Period: 21 Years.
• Launched on 22nd Jan 2015 by Prime Minister Narendra Modi as a part of the Beti Bachao, Beti Padhao campaign.
• 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.
• Account can be opened up to age of 10 years only from the date of birth.
• Normal Premature closure will be allowed after completion of 18 years provided that girl is married (maximum up to 50% of balance standing at the end of the preceding financial year). 
• If minimum Rs 1000/- is not deposited in a financial year, account will become discontinued and can be revived with a penalty of Rs 50/- per year with minimum amount required for deposit for that year.

Public Provident Fund (PPF):

The Public Provident Fund is a savings-cum-tax-saving instrument in India, introduced by the National Savings Institute of the Ministry of Finance in 1968. The aim of the scheme is to mobilise small savings by offering an investment with reasonable returns combined with income tax benefits.

• Rate Of Interest : 7.9%
• Minimum Deposit : INR 500/- 
• Maximum Deposit : INR. 1,50,000/- in a financial year
• Minimum Amount for Opening Account : INR 100 /-
• Tax Benefit : Yes
• Maturity Period: 15 Years ( but the same can be extended within one year of maturity for further 5 years and so on.)
• Joint account cannot be opened.
• Premature closure is not allowed before 15 years.
• Deposits qualify for deduction from income under Sec. 80C of IT Act.
• Interest is completely tax-free.
• Loan facility available from 3rd financial year.
• No attachment under court decree order.
• The PPF account can be opened in a Post Office which is Double handed and above.

National Savings Certificates (NSC): 

National Savings Certificates, popularly known as NSC, is an Indian Government Savings Bond, primarily used for small savings and income tax saving investments in India. It is part of the postal savings system of Indian Postal Service (India Post).

NSC VIII Issue

• Scheme specially designed for Government employees, Businessmen and other salaried classes who are Income Tax assesses.
• No maximum limit for investment.
• No Tax deduction at source.
• Certificates can be kept as collateral security to get loan from banks.
• Trust and HUF cannot invest.​
• A single holder type certificate can be purchased by an adult for himself or on behalf of a minor or to a minor.
• Deposits qualify for tax rebate under Sec. 80C of IT Act.
• The interest accruing annually but deemed to be reinvested under Section 80C of IT Act.
• Rate of interest 7.9​%.​
• Maturity value of a certificate of INR.100/- purchased on or after 1.10.2016 shall be INR. 146.93 after 5 years.
• Maturity value of a certificate of INR.100/- purchased on or after 1.4.2012 shall be INR. 14​7.61 after 5 years.
• Investment up to INR 1,00,000/- per annum qualifies for IT Rebate under section 80C of Income Tax Act.