Benefits of Post Office Saving Schemes

Post Office Saving Schemes come up with a number of benefits offered to the investors as outlined below.

Backed by Government of India: Post Office Saving Schemes are backed by the government of India which provides security of principal invested by the persons. This si the biggest advantage of these post office saving schemes that they carry a sovereign guarantee which means it is backed by the government.

Low-risk Investment: One of the primary benefits of Post Office Saving Schemes is their low-risk nature.

Guaranteed Returns: These schemes offer guaranteed returns which offer financial stability to investors.

Choice of Investment Tenure: The investors are free to select the investment tenure based on their own choice and preference which may depend upon their objective of investment.

Availibilty of Different Options: Option to Choose between different schemes make them suitable for both short-term and long-term financial goals.

Tax Benefits: Many of the post office savings schemes such as PPF, NSC, SSY, etc. offer tax deductions of up to Rs.1.50 lakh per year under Section 80C of the Income Tax Act. However, some of the schemes like Post Office Monthly Income Scheme, Post Office Savings Deposit, Post Office Recurring Deposit, etc. do not provide any tax rebate under Section 80C of the Income Tax Act.

No TDS: There are many post office saving schemes which do not make any TDS (tax deducted at source) while making withdrawal of investment amount with interest. Such schemes include Post Office Monthly Income Scheme (POMIS), Post Office Recurring Deposit, Kisan Vikas Patra (KVP), National Savings Certificates (NSC), etc.

Customized Options to Suit Investor Needs: The investors may choose the scheme according to tax implications, returns offered and investment tenures.

Reach in Rural Areas: Post Office Saving Schemes have their reach in rural areas as well which gives people in rural and far-end area of the country to invest their money with suitable schemes.

Long Term Benefits: There are some Post Office Saving Schemes which are long-term oriented such as PPF. They also offer attractive returns and hence they can be used the best retirement/pension plans with the investment period extending up to 20-25 years for a PPF account.