Post Office Other Scheme

Other categories of postoffice schemes are as follows:

1. Time Deposit
2. Senior Citizen Scheme
3. Kisan Vikas Patra
4. National Savings

Time Deposit Overview

Time Deposit is a  banking service similar to a Bank Fixed Deposit  offered by Department of post, Government of India at all post office counters in the country. This scheme is meant for those investors who want to deposit a lump sum of money for a fixed period. Investor gets a lump sum (principal + interest) at the maturity of the deposit. Time Deposit scheme offers a lower, but safer, growth in investment.

Amount of Investment:
The minimum investment in a post-office time deposit is Rs 200  and there is no prescribed upper limit on your investment. Account can be opened in multiples of Rs. 50 in single or joint names.
Time Deposits can be made for the period of 1 year, 2 years, 3 years and 5 years.If amount is withdrawn after 6 months but before 1 year from date of deposit, no interest will be paid. If the amount is withdrawn prematurely after 1 year from the date date of deposit, interest will be paid at 2% less than the rate of interest specified for the period for which the deposit has been held.
This investment option pays annual interest rates between 6.25 and 7.5 per cent, compounded quarterly.
Time period Rate of return (%)
1 Year
2 Years
3 Years
4 Years
Tax Considerations:
  • Interest is liable to tax 
  • Balance exempt from wealth-tax 
  • No TDS from interest
Other considerations:
  • Accounts can be opened in name of minor/person of unsound mind
  • One can take a loan against a time deposit with the balance in your account pledged as security for the loan.
  • Nomination facility is available
Senior Citizen Scheme
A new savings scheme called "Senior Citizens Savings Scheme" has been started with effect from August 2, 2004. Citizens of 60 years of age and above are eligible to invest. Single or joint account (with spouse only) can be opened. Citizens who have retired under a voluntary or a special voluntary retirement scheme and have attained the age of 55 years are also eligible, subject to specified conditions.

Maturity Period:

Maturity period of the deposit will be five years, extendable by another three years.  Initially the scheme will be available through designated post offices through out the country. However, the depositor may be permitted to withdraw the deposit and close the account at any time after the expiry of one year from the date of opening of the account subject to the following conditions:

  • If the account is closed after the expiry of 1 year but before the expiry of 2 years from the date of opening of the account, an amount equal to one and half percent of the deposit shall be deducted.
  • If the amount is closed on or after the expiry of 2 years from the date of opening of the account, an amount equal to 1% of the deposit shall be deducted.

Amount of Investment:

The minimum investment is Rs. 1000 and in multiples of Rs.1000 subject to a maximum of Rs.15 lakh.
The deposit will carry an interest of 9% per annum.


Premature withdrawal after a period of one year will be allowed, subject to some deductions.

Tax consideration:
Interest is liable to tax.
Kisan Vikas Patra

This scheme is available at all post offices and brokers/agents of UTI, LIC and government schemes.

Amount of Investment:
No limit ( available in denominations of Rs. 100, Rs. 500, Rs. 1000, Rs. 5000, Rs. 10000 and Rs 50000)
  • Maturity period of certificate is 8 years and 7 months. 
  • Premature encashment is possible after 2 and half years.
Money doubles in 8 years and 7 months.
Tax Considerations:
  • Interest is not eligible for any tax concession. 
  • No TDS from interest.
Other considerations:
  • Can be purchased from any post office 
  • Interest is paid only on maturity and cannot be claimed prior to maturity 
  • Can be purchased jointly by two adults 
  • It has been declared as "public security" under the provisions of the Mumbai Public Trust Act, 1950 
  • Can be purchased in name of minor.
National Savings
National Savings Certificates (NSC) are certificates issued by Department of post, Government of India and are available at all post office counters in the country. This scheme is specially designed for Government employees, Businessmen and other salaried classes who are IT assesses. It is a long term safe savings option for the investor. Trust and HUF cannot invest. The scheme combines growth in money with reductions in tax liability as per the provisions of the Income Tax Act, 1961. The duration of a NSC scheme is 5 years.  

NSCs are issued in denominations of Rs 100, Rs 500, Rs 1,000, Rs 5,000 and Rs 10,000 for a maturity period of 5 years. There is no prescribed upper limit on investment.

Individuals, singly or jointly or on behalf of minors and trust can purchase a NSC by applying to the Post Office through a representative or an agent. 

One person can be nominated for certificates of denomination of Rs. 100- and more than one person can be nominated for higher denominations.

The certificates are easily transferable from one person to another through the post office. There is a nominal fee for registering the transfer. They can also be transferred from one post office to another.

One can take a loan against the NSC by pledging it to the RBI or a scheduled bank or a co-operative society, a corporation or a government company, a housing finance company approved by the National Housing Bank etc with the permission of the concerned post master.

Though premature encashment is not possible under normal course, under sub-rule (1) of rule 16  it is possible after the expiry of three years from the date of purchase of certificate.

Tax benefits are available on amounts invested in NSC under section 88, and exemption can be claimed under section 80L for interest accrued on the NSC. Interest accrued for any year can be treated as fresh investment in NSC for that year and tax benefits can be claimed under section 88. 

Investment up to Rs. 1,00,000/- per annum qualifies for IT Rebate under section 80C of IT Act.

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