Saving Schemes available at Indian Post

1. Indian Postal Schemes
BY
K. BHARGAV
STUDENT AT UNIVERSITY OF HYDERABAD

2. Indian Postal savings schemes
 5 Year Post Office Recurring Deposit Account (RD)
 Post Office Time Deposit Account (TD)
 Post Office Monthly Income Scheme Account (MIS)
 15 year Public Provident Fund Account (PPF)
 National Savings Certificate (NSC)
 Kisan Vikas Patra (KVP)

3. 5-Year post Office Recurring Deposit Account (RD)
Recurring Deposit is a special kind of Term Deposit which help
people with regular incomes to deposit a fixed amount every
month into their Recurring Deposit account and earn interest at
the rate applicable to Fixed Deposits.
Minimum Amount ₹10/- per month and any amount in multiples of ₹5/-
No maximum limit
From 01/03/2019
Interest Rate – 7.3% Compounded quarterly.

4. Example
 We invest ₹1,000/- in the scheme every month.
 Period of investment 5 years.
 Interest is compounded Quarterly.
 Rate of interest is 7.3%
 Date of Investment 01/03/2019.
 Date of Maturity 01/03/2024.

5. Explanation of Scheme (rounded to nearest rupee)
Year Cummulative
Deposite
Interest Closing Balance
1 ₹12,000 ₹2,557 ₹12,557
2 ₹24,000 ₹2,057 ₹26,057
3 ₹36,000 ₹3,842 ₹39,842
4 ₹48,000 ₹7,389 ₹55,389
5 ₹60,000 ₹12,102 ₹72,102
Total ₹25,949

6. Post Office Time Deposit Account (TD)
A term deposit is a cash investment held at a banks, post office,
financial institution. Your money is invested for an agreed rate of
interest over a fixed amount of time, or term.
Minimum Amount ₹200/- and its multiples
No maximum limit

7. Example
 We invest ₹6,00,000/- in the scheme.
 Period of investment 1year, 2years, 3years, 5 years.
 Interest is payable annually but is calculated quarterly.
 Rate of interest 1year- 7.0%, 2 years-7.0%, 3years-7.0%, 5years-7.08%.
 Date of Investment 01/03/2019.
 Date of Maturity 01/03/2020, 01/03/2021, 01/03/2022, 01/03/2024 respectively.

8. Explanation of Scheme (rounded to nearest rupee)
Year Investment Interest Closing
Balance
1 ₹6,00,000 ₹43,115 ₹64,3115
2 ₹43,115 ₹6,86,230
3 ₹43,115 ₹7,29,345
5 ₹48,186 ₹7,77,531
Total ₹1,77,531

9. Post Office
Monthly
Income
Scheme (MIS)
Post Office Monthly Income Scheme is a scheme in which you
invest a certain amount and earn a fixed interest every month. As
the name suggests, you can invest in this from any post office.
Prematurely en-cashed after one year but before three years at
the discount of 2 per cent of the deposit and after three years at
the discount of 1 per cent of the deposit.

10. Example
 We invest ₹4,50,000/- in the scheme.
 Period of investment 5 years.
 Rate of interest is 7.3%
 Date of Investment 01/03/2019.
 Date of Maturity 01/03/2024.

11. Explanation of Scheme (rounded to nearest rupee)
 Maximum investment = ₹4,50,000
 Maturity period 5 years
 Monthly cash flow = ₹4,50,000 × 7.3% × 1/12
= ₹2738 per month for 5 years.
 If the amount is withdrawn between 1-3 years,
= ₹4,50,000 – 2% (₹9,000)
= ₹4,41,000
 If the amount is withdrawn between 3-5 years,
= ₹4,50,000 – 1% (₹4,500)
= ₹4,45,500

12. 15 year Public Provident Fund Account (PPF)
PPF stands for Public Provident Fund which is a long-term
investment scheme declared by the government of India. It is a
safe deposit scheme that offers tax exemptions and attractive
interest rates. A Public Provident Fund (PPF) account can be
opened at a Post Office. The PPF Account was introduced in
1968.
A subscriber can contribute any amount between Rs.500 p.a.
To Rs.1.5 lakh p.a.

13. Example
 We invest ₹10,000/- in the scheme.
 Maturity period is 15years.
 Withdrawal is permissible every year from 7th financial year from year of opening
account.
 Loan facility available from 3rd financial year.
 Date of Investment 01/03/2019.
 Date of Maturity 01/03/2034.

14. Year Opening
balance
Deposit Interest Closing
balance
Loan Withdrawl
1 ₹0 ₹10,000 ₹800 ₹10,800 NA NA
2 ₹10,800 ₹10,000 ₹1,664 ₹22,464 NA NA
3 ₹22,464 ₹10,000 ₹2,597 ₹35,061 NA NA
4 ₹36,061 ₹10,000 ₹3,605 ₹48,666 A NA
5 ₹48,666 ₹10,000 ₹4,693 ₹63,359 A NA
6 ₹63,359 ₹10,000 ₹5,869 ₹79,228 A NA
7 ₹79,228 ₹10,000 ₹7,138 ₹96,366 A NA
8 ₹96,366 ₹10,000 ₹8,509 ₹1,14,876 A A
9 ₹1,14,876 ₹10,000 ₹9,990 ₹1,34,866 A A
10 ₹1,34,866 ₹10,000 ₹11,589 ₹156,455 A A
11 ₹1,56,455 ₹10,000 ₹13,316 ₹1,79,771 A A
12 ₹1,79,771 ₹10,000 ₹15,182 ₹2,04,953 A A
13 ₹2,04,953 ₹10,000 ₹17,196 ₹2,32,149 A A
14 ₹2,32,149 ₹10,000 ₹19,372 ₹2,61,521 A A
15 ₹2,61,521 ₹10,000 ₹21,722 ₹2,93,243 A A
Total ₹1,43,242

15. National Savings Certificates (NSC)
National Savings Certificates, popularly known as NSC, is an Indian
Government Savings Bond, primarily used for small savings and income tax
saving investments in India. It is part of the postal savings system of Indian
Postal Service.
Minimum Amount for opening of account ₹100/- and in multiples of ₹100/-
No maximum limit
From 01/03/2019
Interest Rate – 8% Compounded Annually but payable at maturity.

16. Example
 We invest ₹10,000/- in the scheme.
 Lock in period is 5years.
 Interest is compounded Annually but payable at maturity.
 Date of Investment 01/03/2019.
 Date of Maturity 01/03/2024.

17. Detail Explanation of Scheme
(rounded to nearest rupee)
Year Opening Balance Interest Closing balance
1 ₹10,000 ₹800 ₹10,800
2 ₹10,800 ₹864 ₹11,664
3 ₹11,664 ₹933 ₹12,597
4 ₹12,597 ₹1,008 ₹13,605
5 ₹13,605 ₹1,088 ₹14,693
Total ₹4693

18. Kisan Vikas Patra (KVP)
Kisan Vikas Patra (KVP)
It is a savings scheme available at India Post Offices in the form of
certificates. It is fixed rate small savings scheme that
focuses on doubling your investment after a predetermined period of
time.
Minimum Amount for opening of account ₹1000/- and in multiples of ₹1000/-
No maximum limit
From 01/03/2019
Interest Rate 7.7%, Compounded Annually but payable at maturity.
Certificate can be encashed after 2yrs and 6mons from the date of issue.
Amount Invested doubles in 9 years and 4 months (112months)

19. Example
 We invest ₹1,00,000/- in the scheme to double our amount.
 Lock in period is 9years 4months (112 months).
 Interest is compounded Annually but payable at maturity.
 Date of Investment 01/03/2019.
 Date of Maturity 01/07/2028.

20. Detail Explanation of Scheme
(rounded to nearest rupee)
Year Opening Balance Interest (7.7%) Closing Balance
1 ₹1,00,000 ₹7,700 ₹1,07,700
2 ₹1,07,700 ₹8,293 ₹1,15,993
3 ₹1,15,993 ₹8,932 ₹1,24,925
4 ₹1,24,925 ₹9,619 ₹1,34,544
5 ₹1,34,544 ₹10,360 ₹1,44,904
6 ₹1,44,904 ₹11,158 ₹1,56,062
7 ₹1,56,062 ₹12,017 ₹1,68,079
8 ₹1,68,079 ₹12,942 ₹1,81,021
9 ₹1,81,021 ₹13,938 ₹1,94,959
9.4 ₹1,94,959 ₹5004 ₹1,99,963
Total Inflow of Interest ₹99,963

21. Thank You