Indian Post Office offers many small savings schemes which are popular among senior citizens and risk averse individuals. Interest rates on these small savings schemes are revised every quarter by the government of India. As of now, the India Post offers 10 schemes catering to the different needs of individuals and their investment goals.
Post office small savings schemes features of each scheme vary along with interest rates, term and its premature withdrawal rules, as per the India Post website.
Here is a glance at the premature withdrawal rules of small savings schemes.
Post office Savings Account (POSA)
You can withdraw and close the account anytime. Interest paid is 4.0% per annum on individual and joint accounts.
National Savings Recurring Deposit Account(RD)
National Savings Recurring Deposit Account (RD) can be closed prematurely after three years from the date of account opening by submitting the appropriate application form to the relevant Post Office. If the account is closed prematurely, even if it is only one day before maturity, the interest rate on the PO Savings Account will apply.
It should be noted that no account can be closed prematurely until the term for which the advance deposits have been made.
National Savings Time Deposit Account(TD)
No deposit will be closed before six months from the date of deposit. If a TD account is cancelled after six months but before one year, the PO Savings Account Interest rate will apply. If a 2/3/5 year TD account is prematurely terminated after 1 year, interest will be calculated at 2% less than the TD interest rate (i.e. 1/2/3 years) for completed years, and PO Savings Interest rates will be applicable for part time shorter than a year.
A TD account can be cancelled prematurely by submitting the prescribed application form along with the pass book to the relevant Post Office.
National Savings Monthly Income Account(MIS)
No deposit can be withdrawn before one year from the date of deposit. If the account is closed after one year but before three years from the date of opening, a 2% deduction from the principle will be deducted and the remaining amount will be paid. If the account is closed after 3 years but before 5 years, a 1% reduction from the principle will be deducted and the remaining amount will be paid.
Senior Citizens Savings Scheme Account(SCSS)
Account can be prematurely closed any time after date of opening. (ii) If account closed before 1 year, no interest will be payable and if any interest paid in account shall be recovered from principle. (iii) If account closed after 1 year but before 2 year from the date of opening, an amount equal to 1.5 % will be deducted from principal amount. (iv) If account closed after 2 year but before 5 year from the date of opening, an amount equal to 1 % will be deducted from principal amount. (v) Extended account can be closed after the expiry of one year from the date of extension of the account without any deduction… . Read More
Source By: economictimes
