Post Office offers a lot of saving schemes with different interest rates. Two of the many savings schemes, post office offers are Sukanya Samriddhi Account and Senior Citizens Savings Scheme (SCSS). The senior citizen savings scheme is for people above the age of 60 years while the Sukanya Samriddhi scheme is meant for a girl child only. These savings schemes offer more than 8 per cent interest rate currently. The interest rate on these post office saving schemes move in line with the government’s interest rates on small savings schemes, which are revised on a quarterly basis.
Sukanya Samriddhi scheme
Interest rate offered in this scheme is 8.4% per annum. This scheme requires a minimum investment of Rs. 250 and a maximum of Rs. 1,50,000 in a financial year. The subsequent deposit should be made in multiple of Rs. 100, said India Post. Deposits can also be made in lump-sum amount. However, there is no limit on the number of deposits either in a month or in a financial year.
The account can be closed after completion of 21 years. However, normal premature closure is allowed after completion of 18 years, provided that girl is married.
Senior Citizen Saving Scheme
Interest rate offered in this scheme is 8.65% per annum. This account can be opened in cash if the amount is below Rs. 1 lakh. However, if the amount is Rs. 1 lakh or more, investors need to deposit a cheque. Under the scheme, nomination facility is available at the time of opening and also after opening of account.
The maturity period of senior citizen saving scheme is five years. Premature closure of the SCSS account is allowed after one year on deduction of an amount equal to 1.5 per cent of the deposit and after two years on deduction of an amount equal to 1 per cent of the deposit.
Income tax benefits
Investments made under this scheme qualify for benefit under Section 80C of the Income Tax Act, 1961. TDS is deducted at source on interest if the interest amount is more than Rs. 10,000 per annum.