Don't just view the post office as a place to drop your Diwali or Christmas cards. You can get some good investments here.
Of course, the carrot being dangled is the tax benefit, the notable exception being Kisan Vikas Patra. Its attractiveness lay in the interest rate being offered which has come down over the years.
Some instruments like the post office recurring deposit force you to save on a monthly basis.
Others like the PPF have an annual compulsion to it.
If you have just come into a lump sum and don't want to 'blow it up', then opt for the one-time investment of post-office time deposits. You can select an investment tenure that suits you.
The National Savings Certificate is also a one-time investment, but your money should stay deposited for six years.
If you are totally risk-averse or if you have a high tax liability, then investing in some of these schemes is a must. Below is what's available on a platter.
|
Instrument
|
Tenure
|
Interest
|
Limit on Investment
|
Tax Benefit
|
Liquidity
|
Availability
|
Post office
recurring
deposit
|
5
|
10.5 compounded quarterly
|
Rs 10 per month – no limit. Investments in multiples of Rs 5
|
Section 80L
|
Premature withdrawal, No loan
facility
|
Head post offices, Select sub-post
offices
|
Post office
time deposits
|
1
2
3
5
|
8
9
10
10.5 (compounded quarterly)
|
Rs 50 – no limit. Investments in
multiples of Rs 50
|
Section 80L
|
Premature withdrawal, Loan facility
|
Head post offices, select sub-post
offices
|
Post office
savings
account
|
Not applicable
|
4.5
|
Rs 50,000
|
Section 10
|
Withdrawal, No loan facility
|
Head post offices, Select sub-post
offices
|
Post office
monthly
income
scheme
|
6
|
11 compounded annually (10% bonus on
maturity)
|
Rs 2,04,000: single account Rs
4,08,000: joint account
|
Section 80L
|
Premature withdrawal, No loan
facility
|
Head post offices, Select sub-post
offices
|
National
Savings
Scheme
1992
|
None but can be closed after 4 years
after the last deposit
|
10.5 compounded annually
|
Rs 100 - Rs 40,000 p.a.
|
Section 88, Section 80L
|
Premature withdrawal, No loan
facility
|
Head post offices, Select sub-post
offices
|
National
Savings
Certificate
|
6
|
11 compounded half-yearly
|
Rs 100
Rs 500,
Rs 1,000,
Rs 5,000,
Rs 10,000
|
Section 88, Section 80L
|
No premature withdrawal, No loan
facility
|
Head post offices, Select sub-post
offices
|
Public
Provident
Fund
|
15
|
11 (compounded annually)
|
Rs 100 – Rs 60,000 p.a. Investment in
multiples of 100
|
Section 88, Section 10
|
Premature withdrawal, loan facility
|
Select post-offices, banks
|
Kisan Vikas
Patra
|
6
|
Investment doubles, interest
compounded annually
|
Rs 1,000, Rs 5,000, Rs 10,000
|
None
|
Premature withdrawal, No loan
facility
|
Post offices, brokers/ agents of LIC,
UTI
|
RBI Relief
bonds
|
5
|
9 compounded half-yearly: cumulative
|
Rs 10,000 – no limit. Investment in
multiples of 1000
|
Section 10
|
No premature withdrawal No loan
facility
|
RBI agents and brokers
|
Deposit
Scheme for
Retiring
Employees
of PSUs
(1991)
|
3
|
10 compounded half-yearly
|
Rs 1,000 – total retirement benefits
|
Section 10
|
Premature withdrawal, No loan
facility
|
SBI branches and subsidiaries, select
nationalized branches, select sub-post offices
|
Deposit
Scheme for
Retiring
Government
Employees
(1989)
|
3
|
10 compounded half-yearly
|
Rs 1,000 – total retirement benefits
|
Section 10
|
Premature withdrawal, No loan
facility
|
SBI branches and subsidiaries, select
nationalized branches, select sub-post offices
|
