In 2023, Indian government made important changes to its small savings schemes, introducing a new scheme, adjusting investment limits, and changing interest calculations.
List of Small Savings Schemes of Post Office
India Post offers a range of small savings schemes, including:
- Post Office Savings Account (SB)
- National Savings Recurring Deposit Account (RD)
- National Savings Time Deposit Account (TD)
- National Savings Monthly Income Account (MIS)
- Senior Citizens Savings Scheme Account (SCSS)
- Public Provident Fund Account (PPF)
- Sukanya Samriddhi Account (SSA)
- National Savings Certificates (VIIIth Issue) (NSC)
- Kisan Vikas Patra (KVP)
- Mahila Samman Savings Certificate
New Limited Period Scheme
Introduce in the 2023 Union Budget, the Mahila Samman Savings Certificate targets female investors.
This one-time scheme extends over two years, concluding in March 2025.
It offers a 7.5% annual interest rate, allows partial withdrawals, and has a maximum deposit limit of Rs 2 lakh.
Post Office Monthly Income Scheme (POMIS)
The 2023 budget increase the limit for single account users from Rs 4 lakh to Rs 9 lakh and for joint account holders from Rs 9 lakh to Rs 15 lakh.
Senior Citizens Savings Scheme (SCSS) enhancements
The maximum investment limit for SCSS has raise from Rs 15 lakh to Rs 30 lakh, providing seniors with the opportunity for higher interest rates and larger deposits.
PPF premature interest calculation changes
Under the Public Provident Fund Scheme, 2019, interest on premature closure will now be 1% lower than the regular credited interest, calculate from the commencement of the current 5-year block period.
Post Office FD premature withdrawal penalty
In the event of premature withdrawal from a five-year account after four years, interest at the Post Office Savings Account rate (4%) will be paid.
Changes to SCSS1
Extended periods for investing retirement benefits
Individuals age above 55 but under 60 now have three months to invest their retirement benefits.
Spousal investment
Government employees’ spouses can invest in the program.
Defined scope of retirement benefits
The notification outlines the components consider as retirement benefits.
Deduction on premature withdrawal
1% of the deposit is deduct if the account is close before 1 year.
No limit on SCSS extension
The account can be extend for multiple 3-year blocks, subject to periodic applications.
Interest on extension
Extended SCSS accounts earn interest based on the prevailing rates at maturity or extended maturity.
Maximum deposit amount
As per the notification, the deposit made at the account opening can be withdrawn after 5 years or each subsequent 3-year block, subject to the maximum deposit limit.
These changes aim to enhance the flexibility, accessibility, and attractiveness of post office savings schemes for a large range of investors.
