CHAPTER 3

POST OFFICE SAVINGS

SCHEMES
 INDIAN POST
For more than 150 years, the Department of Posts (DoP) has been the
backbone of the country’s communication and has played a crucial role
in the country’s social economic development. It touches the lives of
Indian citizens in many ways: delivering mails, accepting deposits under
Small Savings Schemes, providing life insurance cover under Postal Life
Insurance (PLI) and Rural Postal Life Insurance (RPLI) and providing
retail services like bill collection, sale of forms, etc. The DoP also acts
as an agent for Government of India in discharging other services for
citizens such as Mahatma Gandhi National Rural Employment
Guarantee Scheme (MGNREGS) wage disbursement and old age
pension payments. With 1, 55,531 Post Offices, the DoP has the most
widely distributed postal network in the world.

Vision and Mission

Vision
India Post's products and services will be the customer's first choice.

Mission
 To sustain its position as the largest postal network in the world
touching the lives of every citizen in the country.
 To provide mail parcel, money transfer, banking, insurance and retail
services with speed and reliability.
 To provide services to the customers on value-for-money basis.
 To ensure that the employees are proud to be its main strength and serve
its customers with a human touch.
CORE VALUES
We will maintain our iconic status as a unique and trusted national
institution by:

 Always providing the human touch in all our interactions with

society.
 Being responsive and reliable.
 Demonstrating the higher order of integrity , honesty,
transparency, and professionalism.
 Discharging our responsibilities towards the society in an
environment of deep trust , mutual respect, and a culture of service
before help.

STRATEGIC GOALS
 Achieve the long term goal of financial self-sufficiency by
generating surpluses from services.
 Develop, implement and operate a system of standards with
accountability for performance.
 Develop a scalable and flexible technology infrastructure to support
our operations.
 Be the preferred, trusted and reliable service partner for all
customers.
 Be the interface between citizens and government.

ADVANTAGES OF THE POST OFFICE

INVESTMENT- SAVING SCHEMES IN INDIA

1. EASY TO INVEST
THE SAVINGSCHEMES ARE EASY TO ENROL IN AND ARE BEST SUITED FOR
THE RURAL AND AS WELL AS THE URBAN INVESTORS, ANYONE WHO
WANTS TO HEDGE THE RISK IN THE PORTFOLIO FOR A FIXED DECENT
RETURN. THEIR SIMPLICITY AND AVAILABILITY MAKE THESE A MUCH-
PREFERRED SAVINGS OPTION.
 2. SIMPLE PROCEDURE TO ENROLL
LIMITED DOCUMENTATION AND PROPER PROCEDURES IN POST OFFICE
ENSURES THAT THESE SAVING SCHEMES ARE SIMPLE TO OPT FOR AND
SAFE TO BE LOCKED ON TO AS THEY ARE ALSO BACKED BY THE
GOVERNMENT.

3. INVESTMENTS FOR LONG TERM

THE INVESTMENTS IN THE POST OFFICE SCHEMES ARE MORE FORWARD-
LOOKING AND LONG-TERM ORIENTED WITH THE INVESTMENT PERIOD
EXTENDING UP YO 15 YEARS FOR A PPF ACCOUNT. THIS ACTS AS A HUGE
HELP IN RETIREMENT AND PENSION PLANNING.

4. TAX EXEMPTION
MOST OF THESE SCHEMES CARRY WITH THEM TAX REBATES UNDER
SECTION 80C FOR THE DEPOSITE AMOUNT. FEW OF THE SCHEMES LIKE
THE PPF, THE SCSS, THE SUKANYA SAMRIDDHI YOJANA, ETC. ALSO HAVE
THE INTEREST EARNED AMOUNT EXEMPTED FROM TAXATION

5. RISK-FREE AND COMPETENT INTEREST RATES

INTEREST RATES IN THESE SCHEMES RANGE FROM 4%TO 9% WHICH IS
ALSO RISK FREE. THERE IS A MINIMAL AMOUNT OF RISK INVOLVED AS
THIS IS AN UNDERTAKING BY THE GOVERNMENT OF INDIA.

6. DIFFERENT BUCKETS OF PRODUCTS

THERE IS AWIDE RANGE OF PRODUCTS BASED ON DIFFERENT TYPES OF
INDIVIDUALS. PUBLIC PROVIDENT FUND (PPF), KISAN VIKAS PATRA AND
SUKANYA SAMRIDDHI YOJANA ARE SOME OF THE MORE WELL-KNOWN
SCHEMES.

The government has made these small savings schemes available via
post offices to provide a safe investment avenue for the public. By
giving them good returns while keeping their money safe, these
schemes are easy to manage. If the features and benefits iterated
above meet your financial goals, invest in a post savings scheme to
secure your financial future at a minimal risk.

SAVINGS SCHEMES UNDER POST OFFICE

INVESTMENT

 POST OFFICE SAVINGS ACCOUNT

 5-YEAR POST OFFICE RECURRING DEPOSITE
ACCOUNT (RD)
 POST OFFICE TIME DEPOSITE ACCOUNT (TD)
  POST OFFICE MONTHLY INCOME SCHEME ACCOUNT
(MIS)
 SENIOR CITIZEN SAVINGS SCHEME (SCSS)
 15 YEAR PUBLIC PROVIDENT FUND ACCOUNT (PPF)
 NATIONAL SAVINGS CERTIFICATES (NSC)
 KISAN VIKAS PATRA (KVP)
 SUKANYA SAMRIDDHI ACCOUNTS (SSA)

Post Office Savings Schemes

Post Office Savings Account
Salient features including Tax Rebate
 Account can be opened by cash only
 Minimum balance to be maintained in a non- cheque facility
account is INR 50/-
 Cheque facility available if an account is opened with INR 500/-
and for this purpose minimum balance of INR 500/-in an account
is to be maintained
 Cheque facility can be taken in an existing account also
 Interest earned is Tax Free up to INR 10,000/- per year from
financial year 2012-13
 Nomination facility is available at the time of opening and also
after opening of account
 Account can be transferred from one post office to another
 One account can be opened in one post office
 Account can be opened in the name of minor and a minor of 10
years and above age can open and operate the account
 Joint account can be opened by two or three adults
 At least one transaction of deposit or withdrawal in three financial
years is necessary to keep the account active
 Single account can be converted into Joint and Vice Versa
 Minor after attaining majority has to apply for conversion of the
account in his name
 Deposits and withdrawals can be done through any electronic
mode in CBS Post offices.
  ATM facility is available.

5-Year Post Office Recurring Deposit

Account (RD)
Salient features including Tax Rebate
 Account can be opened by cash / Cheque and in case of Cheque
the date of deposit shall be date of presentation of Cheque
 Nomination facility is available at the time of opening and also
after opening of account
 Account can be transferred from one post office to another
 Any number of accounts can be opened in any post office
 Account can be opened in the name of minor and a minor of 10
years and above age can open and operate the account
 Joint account can be opened by two adults
 Subsequent deposit can be made up to 15th day of next month if
account is opened up to 15th of a calendar month and up to last
working day of next month if account is opened between 16th day
and last working day of a calendar month.
 If subsequent deposit is not made up to the prescribed day, a
default fee is charged for each default, default fee @ 0.05 rs for
every 5 rupee shall be charged. After 4 regular defaults, the
account becomes discontinued and can be revived in two months
but if the same is not revived within this period, no further deposit
can be made.
 *If in any RD account, there is monthly default amount , the
depositor has to first pay the defaulted monthly deposit with
default fee and then pay the current month deposit. This will be
applicable for both CBS and non CBS Post offices.
 There is rebate on advance deposit of at least 6 installments
 Single account can be converted into Joint and Vice Versa
 Minor after attaining majority has to apply for conversion of the
account in his name
 One withdrawal up to 50% of the balance allowed after one year.
It may be repaid in one lumpsum along with interest at the
 prescribed rate at any time during the currency of the account

Full maturity value allowed on R.D. Accounts restricted to that of INR.

50/- denomination in case of death of depositor subject to fulfillment of
certain conditions. In case of deposits made in RD accounts by Cheque,
date of credit of Cheque into Government accounts shall be treated as
date of deposit.

National Savings Time Deposit Account

Post Office Time Deposit Account (TD)
Salient features including Tax Rebate

 Account may be opened by individual

 Account can be opened by cash / Cheque and in case of Cheque
the date of realization of Cheque in Govt. account shall be date of
opening of account
 Nomination facility is available at the time of opening and also
after opening of account
 Account can be transferred from one post office to another
 Any number of accounts can be opened in any post office
 Account can be opened in the name of minor and a minor of 10
years and above age can open and operate the account
 Joint account can be opened by two adults.
 Single account can be converted into Joint and Vice Versa
 Minor after attaining majority has to apply for conversion of the
account in his name
 *In CBS Post offices , when any TD account is matured, the same
TD account will be automatically renewed for the period for which
the account was initially opened . Example 2 Years TD account
will be automatically renewed for 2 Years. Interest rate applicable
on the day of maturity will be applied
 The investment under 5 Years TD qualifies for the benefit of
Section 80C of the Income Tax Act, 1961 from 1.4.2007.

National Savings Monthly Income Account

Post Office Monthly Income Scheme Account
(MIS)

Salient features including Tax Rebate

 Account may be opened by individual.
 Account can be opened by cash/Cheque and in case of Cheque the
date of realization of Cheque in Govt. account shall be date of
opening of account.
 Nomination facility is available at the time of opening and also
after opening of account.
 Account can be transferred from one post office to another.
 Any number of accounts can be opened in any post office subject
to maximum investment limit by adding balance in all accounts.
 Account can be opened in the name of minor and a minor of 10
years and above age can open and operate the account.
 Joint account can be opened by two or three adults.
 All joint account holders have equal share in each joint account.
 Single account can be converted into Joint and Vice Versa.
 Minor after attaining majority has to apply for conversion of the
account in his name.
 Maturity period is 5 years from 1.12.2011.
 Interest can be drawn through auto credit into savings account
standing at same post office, through PDCs or ECS./In case of MIS
accounts standing at CBS Post offices, monthly interest can be
credited into savings account standing at any CBS Post offices.
 Can be prematurely en-cashed after one year but before 3 years at
the discount of 2% of the deposit and after 3 years at the discount
of 1% of the deposit. (Discount means deduction from the deposit.)

A bonus of 5% on principal amount is admissible on maturity in respect

of MIS accounts opened on or after 8.12.07 and up to 30.11.2011. No
bonus is payable on the deposits made on or after 1.12.2011.

Senior Citizens Savings Scheme Account

Senior Citizen Savings Scheme (SCSS)
Salient features including Tax Rebate
 An individual of the Age of 60 years or more may open the
account.
 An individual of the age of 55 years or more but less than 60 years
who has retired on superannuation or under VRS can also open
account subject to the condition that the account is opened within
one month of receipt of retirement benefits and amount should not
exceed the amount of retirement benefits.
 Maturity period is 5 years.
 A depositor may operate more than one account in individual
capacity or jointly with spouse (husband/wife).
 Account can be opened by cash for the amount below INR 1 lakh
and for INR 1 Lakh and above by Cheque only.
 In case of Cheque, the date of realization of cheque in Govt.
account shall be date of opening of account.
 Nomination facility is available at the time of opening and also
after opening of account.
 Account can be transferred from one post office to another
 Any number of accounts can be opened in any post office subject
to maximum investment limit by adding balance in all accounts.
 Joint account can be opened with spouse only and first depositor in
Joint account is the investor.
 Interest can be drawn through auto credit into savings account
standing at same post office, through PDCs or Money Order.
 In case of SCSS accounts, quarterly interest shall be payable on 1st
working day of April, July, October and January. It will be
applicable at all CBS Post Offices.
 Quarterly interest of SCSS accounts standing at CBS Post offices
can be credited in any savings account standing at any other CBS
post offices.
 Premature closure is allowed after one year on deduction of an
amount equal to1.5% of the deposit & after 2 years 1% of the
deposit.
 After maturity, the account can be extended for further three years
within one year of the maturity by giving application in prescribed
format. In such cases, account can be closed at any time after
expiry of one year of extension without any deduction.
 TDS is deducted at source on interest if the interest amount is more
 than INR 10,000/- p.a.

Investment under this scheme qualifies for the benefit of Section 80C
of the Income Tax Act, 1961 from 1.4.2007.

Public Provident Fund Account

15 year Public Provident Fund Account

Salient features including Tax Rebate

 An individual can open account with INR 100/- but has to deposit
minimum of INR 500/- in a financial year and maximum INR
1,50,000/-
 Joint account cannot be opened.
 Account can be opened by cash / Cheque and In case of Cheque,
the date of realization of Cheque in Govt. account shall be date of
opening of account.
 Nomination facility is available at the time of opening and also
after opening of account. Account can be transferred from one post
office to another.
 The subscriber can open another account in the name of minors but
subject to maximum investment limit by adding balance in all
accounts.
 Maturity period is 15 years but the same can be extended within
one year of maturity for further 5 years and so on.
 Maturity value can be retained without extension and without
further deposits also.
 Premature closure is not allowed before 15 years.
 Deposits qualify for deduction from income under Sec. 80C of IT
Act.
 Interest is completely tax-free.
 Withdrawal is permissible every year from 7th financial year from
the year of opening account.
 Loan facility available from 3rd financial year.

No attachment under court decree order. The PPF account can be opened
in a Post Office which is Double handed and above.

National Savings Certificates (VIII Issue)

Account
National Savings Certificates (NSC)

Kisan Vikas Patra (KVP )

Salient features
  Certificate can be purchased by an adult for himself or on behalf of
a minor or by two adults.
 KVP can be purchased from any Departmental Post office.
 Facility of nomination is available.
 Certificate can be transferred from one person to another and from
one post office to another.
 Certificate can be en cash after 2 & 1/2 years from the date of
issue.

Sukanya Samriddhi Accounts

Salient features including Tax Rebate

 A legal Guardian/Natural Guardian can open account in the name

of Girl Child.
 A guardian can open only one account in the name of one girl child
and maximum two accounts in the name of two different Girl
children.
 Account can be opened up to age of 10 years only from the date of
birth. For initial operations of Scheme, one year grace has been
given. With the grace, Girl child who is born between 2.12.2003
&1.12.2004 can open account up to1.12.2015.
 If minimum Rs 1000/- is not deposited in a financial year, account
will become discontinued and can be revived with a penalty of Rs
50/- per year with minimum amount required for deposit for that
year.
 Partial withdrawal, maximum up to 50% of balance standing at the
end of the preceding financial year can be taken after Account
holder’s attaining age of 18 years.
 Account can be closed after completion of 21 years.
 Normal Premature closure will be allowed after completion of 18
years /provided that girl is married.
Post and The British Raj (1858-1947)
The British Raj Was Instituted In 1858, When The Rule Of East India
Company Was Transferred to The Crown. A Number Acts Were
Enacted During The British Raj To Expand And Regulate Posts And
Telegraphs Services.Enacted in 1881. On 1 April 1882, Post Office
Savings Banks Opened Throughout India .
1) Postal Life Insurance Began On 1 February 1884 As A welfare
Measure For The Employees Of The Post & Telegraphs
Department As Government Of India.
2) Telegraph Act, 1885
3) The Indian Post Office Act 1898passed By The Legislature On 22
March 1898, Became Effective On 1 July 1898 Regulating Postal
Services. It Was Preceded By Act Ⅲ of 1882 And Act ⅩⅥ Of 1896.
4) The Indian Wireless Telegraphy Act 1933

After Independence In 1947

Since India Became Independent In 1947, The Postal Service Continues
to function on a National wide basis, providing a variety of services. The
Structure Of the Organisation has The Directorate at its apex; Below It
are Circle Offices, Regional Offices, The Superintendent’s Offices,
Head Post Offices, Sub-Post Offices and Branch Offices. In April 1959,
The Indian Postal Department Adopted the Motto “Service Before
Help”; It Revised Its Logo In September 2008. The Number Of Post
Office was 23,344 when India Became Independent in 1947 and these
Were Primarily In urban areas . The number increased to 155,015 in
2016 and 90% of these were in rural areas.

Services

Philately
The First Philately Society In India Was Founded In 6march 1897 To
Service Postage Stamp Collections. Function Includes Designing,
Printing And Distribution Of Special Or Commemorative Postage
Stamps, Definitive Postage Stamps And Items Of postal Stationary,
Promotion Of Philately, Conduct Of Philatelic Examinations At The
National Level, Participation In International Exhibitions And
Monitoring Exhibitions At The State, Regional And District Levels And
Maintenance Of The National Philatelic Museum. Philatelic Bureaus
Were Established In Head Post Offices Located At Circle Headquarters
And At District Capital Head Post Offices (Mukhya Dak Ghars) In The
Country As Of 31st March 2011. A Domestic Philatelic Deposit
Account System Was Introduced On 1 August 1965 At All Philatelic
Bureaus. Customers Are Given Priority In Purchasing Commemorative
Or Special Issue Stamps, First Day Covers And Information Sheets Soon
After Their Issue By Opening A Deposit Account At Any Philatelic
Bureau. The Number Of Philately deposit-Account Holders Grew From
23,905 In 1999-2000 To 168,282 In 2006-2007 And 183,202 In 2008-
2009.Four Philatelic Bureaus The Bombay, Madras, Culcutta And
Parliament Street, New Delhi Gpo’s Are Authorized To Sell United
Nations Stamps. A Quarterly Philatelic Magazine, Philapost , Was
Launched In 2008. The Department Of Post Has Also Developed
Software For Philatelic Inventory Management, Known As "Philsim". It
Is Used For All Activities Relating To Philately, Including Forecasting,
Indenting, Invoicing, Monitoring Supply And Demand And Recording
Sales And Revenue for Commemorative Stamps And Other Philatelic
Products At Philately Bureaus And Counters (And Definitive Stamps
And Stationery At Circle Stamp Depots And Head Post Offices). The
National Philatelic Museum Of India Was Inaugurated On 6 July 1968
In New Delhi. It Had Its Beginnings At A Meeting Of The Philatelic
Advisory Committee On 18 September 1962.

Army Postal Services

The Army Postal Service (Aps), Functions As A Government-Operated
Military Mail System In India. A Primary Feature Of Army Postal
Service Systems Is That Normally They Are Subsidized To Ensure That
Military Mail Posted Between Duty Stations Abroad And The Home
Country (Or Vice Versa) Does Not Cost The Sender Any More Than
Normal Domestic Mail Traffic. In Some Cases, Indian Military
Personnel In A Combat Zone May Post Letters And/Or Packages To The
Home Country For Free, While In Others, Senders Located In A
Specific Overseas Area May Send Military Mail To Another Military
Recipient, Also Located In The Same Overseas Area, Without Charge.

Electronic Indian Postal Orders

The Electronic Indian Postal Order (E-Ipo) Was Introduced On 22
March 2013, Initially Only For Citizens Living Abroad. The Postal
Orders Can Be Used For Online Payment Of Fees For Access To
Information Under The RTI Act Of 2005. The Service Was Expanded
To Include All Indian Citizens On 14 February 2014.

Postal Life Insurance

Postal Life Insurance was Introduced On 1 February 1884 With The
Express Approval Of The Secretary Of State (For India) To Her
Majesty, The Queen Empress Of India. It Was Essentially A Welfare
Scheme For The Benefit Of Postal Employees In 1884 And Later
Extended To The Employees Of Telegraph Department In 1888. In
1894, PLI Extended Insurance Cover To Female Employees Of P & T
Department At A Time When No Other Insurance Company Covered
Female Lives. It Is The Oldest Life Insurer In This Country. There Was
Over 6.4 Million Policies Active As on 31 March 2015 With A Sum
Assured Of ₹130,745 Crore (Us$19 Billion). Premium Income Of PLI
for The Year 2014-15 Was ₹6,053.2 Crore (Us$880 Million). It Was
Extended To All Rural Residents On 24 March 1995.
Policies For Government Employees Include Santhosh (Endowment
Assurance), Suraksha (Whole-Life Assurance), Suvidha (Convertible
Whole-Life Assurance), Sumangal (Anticipated Endowment Policy)
And Yugal Suraksha (Joint Life Endowment Assurance).[29] India Post
Started Rural Postal Life Insurance (RPLI) For Rural Public In 1995.
RPLI Include Gram Santosh (Endowment Assurance), Gram Suraksha
(Whole-Life Assurance), Gram Suvidha (Convertible Whole-Life
Assurance), Gram Sumangal (Anticipated Endowment Assurance) And
Gram Priya.

Postal Savings
The Post Office Offers A Number Of Savings Plans, Including
Recurring Deposit Account, Sukanya Samriddhi Account (SSA),
National Savings Certificates (NSC), KisanVikas Patra (KVP), The
Public Provident Fund, Savings-Bank Accounts, Monthly-Income Plans,
Senior-Citizens' Savings Plans And Time-Deposit Accounts.

Banking
In 2013 It Was Revealed That The Indian Postal Service Had
Formulated Plans To Enter The Banking Industry After RBI Guidelines
For The Issuance Of New Banking Licenses Were Released. Eventually
They Are Planning To Open A Post Bank Of India, An Independent
Banking Service. As Of 29 February 2016, 18,231 Post Offices Are
Utilizing Core Banking Solutions (CBS) In 9583 Post Offices. Atms Are
Installed At 576 Post Office Locations And Debit Cards Issued To Post
Office Savings Bank Customers. Core Insurance Solution (CIS) For
Postal Life Insurance (PLI) Is Rolled Out In 808 Head Post Offices And
Corresponding 24000+Sub Post Offices. In September 2017, It Was
Announced That By 2018 All Of The 1.55 Lakhs Post Offices, Every
Postman, And Grameen Dak Sevak Will Accept All Payment Options
That The India Post Payments Bank (Ippb) Plans To Provide. On 1
September 2018 The India Post Payments Bank Was Inaugurated By
Prime Minister Narendra Modi.

Data Collection
A Collaboration Between The Ministry Of Statistics And Programme
Implementation (Mospi) And The Department Of Posts Has Enabled
The Computation Of Consumer-Price Indices For Rural Areas. These
Statistics Were Previously Unobtainable, Due To Problems Of
Remoteness And Scale. The Agreement Authorises The Postal Service
To Collect Data On Prices Paid For Selected Consumer Goods. In
February 2011, Mospi Published Its First Consumer Price Index (Cpi)
And All-India Consumer Price Index. The Information Has Since Been
Published Monthly, Based On Data Available From 1,181 Villages
Across the country.

E-Commerce Delivery
The Boom In E-Commerce And The Surging Number Of Cash-On-
Delivery Consignments Has Led India Post To Partner With Major E-
Commerce Portals For Delivering Pre-Paid As Well As Cash On
Delivery (Cod) Parcels. According To The Minister For
Communications And Information Technology, Ravi Shankar Prasad,
Revenue Of India Post From Such Deliveries Would Go Up To ₹15
Billion (Us$220 Million) In The Year 2015-16.

Other Services
Other Services Include:
 Post Boxes And Post Bags For Mail Receipt
 Speed Post
 Identity Cards For Proof Of Residence
 India Post Atm
 RMS (Railway Mail Services)
 Post Office Passport Seva Kendras (Popsk)
 Aadhaar Enrollment And Updation
 Western Union
 Postal Life Insurance And Rural Postal Life Insurance
 Savings Bank (Sb/Rd/Td/Mis/Scss/Ppf/Ssa)
 Savings Cash Certificates
 India Post Payments Bank
 Stamp Sales