POST OFFICE TIME DEPOSITS

Eligibility: Option available with Individuals only. Quantum: Investments can start from Rs. 200 and then in multiple of Rs. 50.00. Maturity period: Can be up to 5 years. Return: Lower than banks but safer growth in investment. Periodicity: Interest paid annually with quarterly rest. Premature withdrawal: No interest is paid if before 6 months. Deductions: Exemption for interest income available u/s 80c of IT act up to Rs 1 lakhs for deposits of years. Why favourable: Investment grows at a fixed rate with no risk due to backing of government.

MONTHLY INCOME SCHEME OF THE POST OFFICE

Eligibility:- Only individuals can invest in PO MIS. A minor having attained 10 years of age can open an account in his/her own name directly. Maturity:- Maturity period is 6 years. Money cannot redeemed within the year but can be redeemed after that upon paying a penalty1 3 years. Penalty is 2% of deposit. After 3 years penalty is 1% of deposited amount. Quantum:- The minimum sum can be invested is Rs. 1,500, and can go up to Rs. 450,000 in case of a single account, and Rs. 900,000 in case of a joint account. Return:- The interest rate currently provided on this product is 8% p.a. with a bonus of 5% on the principal amount at the end of the tenure i.e. six years. On account of the bonus, the effective return on the product increases to ~8.9% Tenure: -Investment in this product will be locked in for duration of six years. Salient Features:Interest can be automatically credited to the persons bank every month. Transfer from one post office to another Tax on Post Office MIS

Kisan Vikas Patra (KVP)

Eligibility:- Kisan Vikas Patra can be purchased by the following:

An adult in his own name, or on behalf of a minor

A Trust Two adults jointly

Quantum:- Kisan Vikas Patra are available in the denominations of Rs 100, Rs 500, Rs 1000, Rs 5000, Rs. 10,000 and Rs. 50,000. There is no maximum limit on purchase of KVPs. Return:- Rate of interest 8.40% compounded annually. Money doubles in 8 years and 7 months. Withdrawal:- Premature encashment of the certificate is not permissible except at a discount in the case of death of the holder(s), forfeiture by a pledgee and when ordered by a court of law.

Premature withdrawal:1. If the money is withdrawn before the completion of one year, no interest is payable. 2. After one year and before the lapse of 2 years 6 months a simple interest is applied to the deposit amount 3. Any time after 2 years and 6 months, but before the maturity period, interest is calculated as per Government regulations. Salient Features KVPs can be pledged as security against a loan to Banks/Govt. Institutions. KVPs are transferable to any Post office in India. KVPs can be transferable from one person to another person before maturity. Nomination Facility is available in case of KVPs Duplicate can be issued for lost, stolen, destroyed, mutilated and defaced KVPs Tips for Investing:- A good investment instrument for all retired persons who would require the money at a later date and for those who do not have taxable income.

SPECIAL BANK TERM DEPOSIT SCHEMES

WHO CAN OPEN IT? Individuals, HUF

DENOMINATION? Min: 100/Max:- 100000/INTEREST RATES? Different for different banks

MATURITY PERIOD? 5 years NOMINATION? Available except for minors

Continued..

TRANSFERABILITY PREMATURE ENCASHMENT

DEDUCTIONS U/S 80C INTEREST TAXIBILITY

Company Deposits

Company Deposits are nothing but fixed deposits in financial institution and non-banking finance companies (NBFC) that earn a fixed rate of return over a period of time. The prime objective of investing in company deposits is to earn a higher interest rate compared to bank fixed deposits. The sum invested in a company deposit or the interest that it earns is not eligible for any tax concessions.

Advantages of Company deposits:

Assured return. Higher interest when compared to bank deposits. Low risk when compared to stock market investments. Service at your doorstep. Lock in period in most of the cases is 6 months only. If the interest income is less than Rs.5000 in one financial year, then NO TDS.