Post Office Powerful Scheme: If you are considering investing for safe and excellent returns, the Post Office scheme can help you. This is the Post Office’s Monthly Income Scheme. This is a government-backed scheme. This scheme is specially designed for those who want a monthly income without any risk. Currently, this scheme offers an annual interest rate of 7.4 percent. The payment is transferred directly to the investors’ accounts every month.
A minimum deposit of Rs. 1,000 is required in the Post Office scheme. Investors can deposit money in a lump sum according to their capacity. This scheme is considered quite reliable. The invested amount remains safe and provides regular monthly income. For example, if a person invests up to Rs. 9 lakh, then according to the 7.4 percent interest rate, the monthly income will be Rs. 5550.
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Key Features of the Post Office Monthly Income Scheme
The tenure of this Post Office scheme is 5 years. A single account can be opened, or two to three people can open a joint account. The account holder can nominate a beneficiary to receive the benefits after their death. If a nomination was not made at the time of opening the account, it can be added later. This account can be transferred from any post office in the country to another post office.
The monthly interest received from the Post Office Monthly Income Scheme is taxable and is subject to tax according to the investor’s income tax slab. There is no tax exemption under Section 80C for investing in this scheme. The Post Office does not deduct TDS on the interest, but the investor is required to include it in their annual income.
How Much Can You Invest?
A minimum deposit of Rs. 1,000 is required when opening an account in the Post Office Monthly Income Scheme. Only a one-time deposit is allowed. A maximum of Rs. 9 lakh can be invested in a single account, while the limit is Rs. 15 lakh in a joint account. The total deposit amount across all accounts held by an individual cannot exceed these limits.
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Under this scheme, investors can withdraw their money and close the account after one year of opening it. However, if the investor does not claim the monthly interest, no additional interest is paid.
Account Closure Rules
A Post Office Monthly Income Scheme account cannot be closed within one year of opening it. If the account is closed before three years from the date of opening, 2 percent of the deposit amount is deducted, and the remaining amount is returned. If the account is closed after three years, only a 1 percent deduction is made, and the remaining amount is given to the account holder.