India Post, which also offers banking services besides postal services, offers several savings schemes for small savers. Much like banks, post offices across the country offer the facility of fixed deposits and recurring deposits. The monthly income scheme or MIS of post offices offers a regular income to savers. The interest rates on post office fixed deposits, recurring deposits and MIS range from 6.6 per cent to 7.4 per cent. The three schemes are among the total nine schemes offered by India Post, which is also starting its payment banks soon.
Given below is a comparison of post office fixed deposit, post office recurring deposit, post office monthly income scheme:
Post office fixed deposit
Also known as time deposit, post office fixed deposit accounts can be opened by an individual via cash/ cheque. The account can be transferred from one post office to another. A nomination facility is available at the time of opening and also after opening of the fixed deposit account. While there is no limit on the maximum amount that can be deposited in this account, a minimum of Rs. 200 and is required to open the post office fixed deposit account.
Post office FD rates 2018
Interest on post office payable annually but calculated quarterly.
The investment under five years fixed deposit qualifies for the benefit of Section 80C of the Income Tax Act, 1961.
Post office recurring deposit
The post office RD account, known as the five-year post office recurring deposit account can be set up with a minimum amount of Rs. 10 per month. In a recurring deposit, the investor deposits a fixed amount of money in regular intervals. Contribution in multiples of Rs. 5 can be chosen to invest in the five-year RD account. The account comes with the option of withdrawal of up to 50 per cent of the balance after one year, among other features.
Post office recurring deposit rates 2018
Post office recurring deposit offers an interest rate of 6.9 per cent per annum. Post office recurring deposit rate is compounded on a quarterly basis, which means an RD of Rs. 10 – in which the account holder pays Rs. 10 every month – provides a return of Rs. 717.43 in the maturity period of five years.
Post office monthly income scheme
Post office monthly income scheme accounts can be opened by individuals via cheque/ cash. An individual can invest maximum Rs. 4.5 lakh in MIS (including his share in joint accounts). The account can be 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. (Discount means deduction from the deposit.)
Post office MIS interest rate 2018
Post office monthly income scheme offers interest rate of 7.3 per cent per annum. The interest on post office MIS account is payable on a monthly basis.