Post Office Schemes PPF, SSY & SCSS
The coronavirus epidemic has made us understand how much every small savings and safe deposit is worth. Often we wait for such a time that as soon as a good amount comes, we will invest. Usually it happens that the time does not come and we keep postponing our savings and investment plans. If we invest small savings from the beginning without waiting for any time, then in future we will get big funds. Whenever talking about small savings, investment is important to be safe. In such a situation, there are some schemes of post office i.e. post office in which we can invest from children to elderly parents. The special thing in these schemes is that not only do they get guaranteed returns, but there is no tension to sink your money. Now the facility of online deposit can also be availed through India Payment Post Bank (IPPB). You can make millions of funds in future by making these fixed investments.
Post office PPF account can be opened from child to adult. This fund will be useful during higher education of the child. PPF account can be started from minimum 500 rupees. The annual interest rate on the account is currently 7.1 percent. It is necessary to deposit minimum 500 rupees and maximum 1.5 lakh rupees in the account in a financial year.
If you want to take advantage of the entire interest of the month, then deposit it in PPF by the 5th of every month. Nomination facility at post office PPF, facility to open another PPF account in the name of minor.
The post office PPF has a maturity period of 15 years and cannot be closed earlier. However in select cases such as spouse or dependent children with fatal illness, higher education of children or settling abroad, it can be closed if required after completion of 5 years.
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Investment in post office PPF, interest on it and the amount received on maturity, all three are exempt from tax under the Income Tax Act. Post office PPF account can be extended in block of 5 years after completion of maturity period.
After the completion of one year of the Post Office PPF account and before the completion of 5 years, it can be taken a loan. Apart from this, it can also be withdrawn after the completion of 5 years of the account. Online deposit facility through intra operable netbanking / mobile banking at Post Office PPF, online deposit facility available from India Post Payments Bank Savings Account.
Sukanya Samriddhi Scheme (SSY)
This post office scheme specially designed for daughters is very popular. Under this scheme, this account can be opened after the birth of your child. In SSY, parents can open an account in the name of a girl up to the age of 10 years. Only one account will be opened in the name of a girl child. SSY account can start from a minimum of Rs 250.
In this, a minimum deposit of Rs 250 and maximum of Rs 1.5 lakh has been fixed in a financial year. Talking about the interest rate, at the moment the Sukanya Samriddhi Yojana account is getting an annual interest of 7.6 percent in the post office. One can invest in Sukanya Samriddhi Scheme for a maximum period of 15 years.
Sukanya Samriddhi account can be closed only after the girl is 21 years old. However, normal premature closure is allowed when the child is 18 years of age. After the age of 18, the child can do partial cash withdrawal from SSY account.
Withdrawal limit is up to 50 per cent of the balance in the account at the end of the last financial year, tax deduction up to Rs 1.5 lakh can be claimed under section 80C on the amount deposited in SSY. Apart from this, the interest on the deposit and the money received on completion of the maturity period is also tax free. In this way SSY is a tax saving scheme of ‘EEE’ category.
Senior Citizen Savings Scheme (SCSS)
Post office is a great option for elderly parents on fixed income at savings. The maturity period of this scheme is 5 years. The current interest rate on SCSS is 7.4 percent annually. This account can be invested only once, which ranges from a minimum of Rs 1000 to a maximum of Rs 15 lakh. Under SCSS, a person 60 years or older can open an account.
If someone is 55 years or more but less than 60 years old and has taken VRS, then he can also open an account in SCSS. But the condition is that he will have to open this account within one month of getting the retirement benefits and the amount to be deposited in it should not be more than the amortization of the retirement benefits. Under SCSS, the depositor can also keep more than one account at the joint with individual or his wife / husband. But together with all, the maximum investment limit cannot exceed 15 lakhs.
Premature closure is allowed on the Cenium Citizen Savings Account, but the Post Office will not pay any interest on closing the account before the completion of one year. At the same time, after closing the account after 1 year of account opening, 1.5% of the deposit will be deducted, after 2 years, 1% of the deposit will be deducted.
After completion of maturity period, the account can be extended for another three years. Talking about tax, if your interest amount exceeds Rs 50,000 annually under SCSS, then TDS is deducted. However, investment in this scheme is exempt under Section 80C of the Income Tax Act. Nomination facility on SCSS, facility to transfer accounts from one post office to another, facility to open multiple SCSS accounts in a single office.
Money in post office 100 percent safe
Post office savings schemes are safer for small savings investors. This is because if the postal department fails to return the money, then there is sovereign guarantee on the deposited money of the post office. That is, if the postal department fails to return the investors’ money, then the government goes ahead and guarantees the investors money.
In some situation your money is not trapped. The money used in the post office scheme is used by the government for its works. For this reason, the government also gives guarantee on these money.
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On the other hand, your entire deposited capital in the bank is not 100 percent safe. If a bank defaults, then in that case the DICGC i.e. Deposit Insurance and Credit Guarantee Corporation guarantees just Rs 5 lakh security to the customers in the bank.
This rule applies to all branches of the bank. This includes both principal and interest. That is, if there is more than 5 lakhs by adding both, then only 5 lakhs are considered safe.
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