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.
Easy Access: Due to reach of post offices in every corner of the country, the scheme can be accessed and invested very easily. The extensive network of post offices throughout the country makes it possible that the scheme is easily accessible and convenient for investment. With a post office in nearly every locality, individuals from urban to remote areas can comfortably participate in the scheme.
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. There are some schemes which require lump sum amount suited to one set of investor and there are other schemes which require regular monthly investment which suit to another set of investors.
Financial Inclusion: Thanks to the vast network of over 1.55 lakh post offices across the country, post office schemes are easily accessible not only to the rural population but also the urban population conveniently. In that way, such schemes contributes to national savings.
Easy Process: Post Office investment does not require lenghthy documentation and large application forms. The investment procedure in post office schemes is very easy and simple. There are many options available for investment. These options are,
- Online through Internet Banking: Activate Internet banking, login and invest
- Through Mobile Banking App: Install 'India Post Mobile Banking App', login and invest
- By Visiting Any Post Office: Go to the post office, fill up the form and deposit amount
- By Visiting Any Bank Branch: Visit the bank branch, fill up the form and deposit amount
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. Out of the total 1.55 lakh post offices, 1.39 lakh (89.76%) serve the rural areas. Postal Department has also launched a scheme 'Five Star Villages' to offer universal coverage of flagship postal schemes in rural areas of India. This scheme runs public awareness programs to provide details about various post office saving schemes particularly in interior villages.
Gramin Dak Sevaks visit door-to-door to conduct awareness campaign on all post office schemes in order to cover all eligible villagers who can invest.
Transparent Policies: Post Office Saving Schemes have very clear and transparent 'Terms and Conditions'. There are no hidden charges. The details about various schemes are available which will help you to invest in the scheme as per your investment motive.
Long Term Benefits: There are some Post Office Saving Schemes which are long-term oriented such as PPF, Sukanya Samriddhi Yojana. 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. One can invest in 'Sukanya Samriddhi Yojana' for the daughter's future. The corpus accumulated under Sukanya Samriddhi Yojana can be used for higher education or marriage purpose. This will provide financial freedom to the girl child.
Transfer of Account Between Post Offices
Post office offeres the facility of 'Transferability between Post Offices'. Post office saving scheme accounts are transferrable from one post office to another one, anywhere in India. In order to transfer of account, the depositor will have to apply in the prescribed form SB 10(B)/NC-32. He also attach existing Passbook and KYC documents to the application form. He is required to pay the nominal charges for this. For transfer of account, he will have to submit prescribed application form along with pass book and prescribed fee (Rs. 100+GST) at concerned Post Office. He can submit the transfer application either in transferring office or transferee office. Transfer of account will be processed by respective Head Post Offices.
A post office scheme Kisan Vikas Patra (KVP)can be transferred from one person to another person. KVP certificate can be transferred from one individual to another through a written letter which needs to be submitted to the respective post office. The transferee must be an Indian citizen and should be eligible to invest in KVP.