Post Office Saving Account Compare

Additional Useful Information

• The minimum balance required to open and maintain a Post Office Savings Account is ₹500.

• There is no maximum limit as to how much an investor can invest in this scheme.

• The maturity period of a Post Office Savings Account is indefinite. The account can be closed at any time.

• Withdrawal of funds is permissible. It is to be noted that the balance cannot fall below ₹500. If the balance is less than this amount for one financial year, a penalty of ₹100 is charged.

• The account holder can nominate a person to receive the funds in the event of death.

• This investment is suitable for investors with a low-risk appetite and those who want regular income with negligible risk.

• Interest payments are made at the end of the financial year.

Returns *

• Post Office Savings Account scheme guarantees returns.

• There is only one component of return in this scheme that is the interest payment made at the end of each financial year.

• In contrast to other traditional debt instruments, this investment mode offers lower returns.

• Currently, 4% interest per year can be earned in this mode of investment.

Risk Level

• Post Office Savings Account is a very low risk investment option as it is backed by the government of India.

• This means that deposits in a Post Office Savings Account are safe and secure since the government can never default.

Liquidity

• Post Office Savings Account is a highly liquid investment option, which means that investors can easily withdraw funds as per their requirement.

Interesting Facts

• If no deposit/withdrawal takes place in an account during continuous three financial years, the account will be treated as silent/dormant.

• There is no lock in period for this scheme.

• There is flexibility of transferring this scheme from one post office to another.

Tax Implications

• This scheme is taxable. Taxes are levied based on the interest collected.

• Any interest that investors receive is added to their taxable income and they need to pay tax according to their income slab.

• There is no capital gains tax applicable.

• It is to be noted that Interest up to ₹10000 per year is tax free. This means, no tax will be charged on any interest payments received from this scheme, that are ₹10000 or less. This is under section 80TTA of the income tax act.

Where To Invest

• https://www.indiapost.gov.in/Financial/Pages/Content/Post-Office-Saving-Schemes.aspx