Post office savings is a good financial service offered by the Department of Posts. This is the oldest and the largest banking service institution. This is operated by the Department of Posts on behalf of the Ministry of Finance, Government of India. As per records, more than 21 crores of post office savings accounts are being operated currently. There are more than 100,000 post offices across the country wherein these post office savings accounts are being operated. There are a variety of post office savings schemes being offered by the Department of Posts like the post office savings account schemes, time deposit schemes, public provident fund schemes, monthly income schemes, Kisan Vikas Patras, senior citizens savings schemes etc.
Post office savings account offers an interest rate of 3.5 % on individual and joint accounts. There is no fixed tenure for holding these accounts. A cheque facility is available for post office savings accounts, and these accounts carry a minimum investment denomination of Rs. 50 and have a maximum limit of Rs. 1 lakh in the case of invidiual and 2 lakhs when holding a join account. The senior citizens of the country also have a post office savings scheme, called the Senior Citizens Savings Schemes. This scheme enjoys and interest rate of 9% per annum. The tenure of this scheme is 9 years. Only 1 deposit is allowed in multiples of Rs.1000. The maximum limit for this scheme is Rs. 15 lakhs. Some norms for this scheme are that the age of the scheme holder should be above 60 or 55 plus if retired under superannuation. This investment qualifies for deduction under section 80 of the Income Tax Act.
Another of post office savings schemes includes the Post Office Time Deposit Account. The minimum set for this scheme is Rs. 200 and its multiples thereof and has no maximum limit. A salient feature of this scheme is that long term accounts can be closed after a time period of one year for discounted interest. This can also be closed after 6 months but less than a year for zero interest. Although the interest is calculated quarterly, it is paid on a yearly basis.