India Post or Department of Posts offers various schemes that offer fixed returns on investment. These schemes are recognized and validated by the government. Among the nine savings schemes that it provides, recurring deposit or RD account and monthly income scheme (MIS) offer an interest rate of 5.8 and 6.6 percent for the current quarter.
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Both schemes offer a guaranteed return as there is no dependency on the markets.
In view of this, let’s understand both the schemes in detail:
Minimum/maximum investment
The maximum investment limit in case of MIS is Rs 4.5 lakh in single account and Rs 9 lakh in joint account. The investments should be done in multiples of Rs 1,000.
In case of RD, minimum of Rs 100 per month or any amount in multiples of Rs 10 is required. There is no maximum limit on investment.
Interest rates calculation
The interest on MIS account is payable monthly, while interest rates are compounded quarterly in case of RD account.
Maturity
Post office MIS account matures in five years. The maturity period of post office RD account is also 5 years. Account can be extended for further 5 year by giving application at account office, according to India Post.
Premature Withdrawal
The MIS account can be prematurely encashed after one year but before three years at the discount of 2 percent of the deposit and after three years at the discount of 1 per cent of the deposit, according to India Post. Discount, here, means deduction from the deposit.
In case of post office RD account, one withdrawal up to 50 percent of the balance is 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.
Disclaimer: CNBCTV18.com advises users to check with certified experts before taking any investment decisions.
First Published: Aug 10, 2020 8:41 PM IST
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