Undoubtedly, Post Office Savings Schemes are considered as probably one of the best savings instruments due to the safety, security and financial stability benefits they provide. The two biggest reasons behind the immense popularity of Post Office Savings Schemes are great financial returns and full security.
According to the latest circular issued by the Department of Posts, the Modi government has decided to keep the interest rates on post office schemes unchanged for the July-September quarter of FY 2020-21. This circular has been issued on dated July 1, 2020. Here is all you need to know about the latest interest rate on Post Office Savings Account, Post Office 5-Year RD and Post Office Term Deposits:-
Post Office Savings Accounts: This will fetch 4% interest
Post Office 5-Year RD: This will give investors 5.8% interest
Post Office Term Deposits: For 1-3 years – interest rate of 5.5%. The 5-Year Post Office Term Deposit will give investors 6.7%.
Moreover, post office investments made under the 5-year fixed deposits are eligible for income tax benefits under Section 80C of the Income Tax Act, 1961.
Post Office Savings Account is like any other savings account with a bank, except for the face that it is with a post office. You can open only one post office account with one post office but an account can be transferred from one post office to another. Conveniently, you can also open an account in the name of a minor.
One of the best parts of the post office savings account is that no TDS is deducted on the same.
Post Office investments come with a number of saving schemes benefits including high rate of interest as well as tax benefits. Also, it carries the sovereign guarantee of the Indian Government. Post office tax benefit schemes are tax exempt under Section 80c, i.e. tax exemption up to Rs. 1,50,000 is allowed.