National Savings Schemes in India: A Safe Option
National Savings Schemes (NSS) in India are secure investments backed by the government. One such scheme is the Post Office National Savings (Monthly Income Account) Scheme (MIS), offering a fixed interest rate and monthly income to depositors. It’s a reliable choice for those seeking a steady income stream. However, seeking advice from a financial advisor is advisable to align investments with your savings goals.
Details of Post Office National Savings Scheme
- Minimum and Maximum Investments: You can open an MIS account with a minimum of Rs. 1000. In a single account, you can invest up to Rs. 9 lakh, and in a joint account, the limit is Rs. 15 lakh.
- Maturity Period: The account matures in 5 years.
- Multiple Accounts: Depositors can operate multiple accounts within the scheme, but there’s a maximum limit for investment in single or joint accounts.
Interest Payments and Deposits
- Interest Payment: Interest is paid monthly from the opening date until maturity. If not claimed monthly, it won’t accumulate additional interest. Excess deposits are refunded.
- Interest Taxation: Interest earned is taxable for the depositor.
Early Closure and Maturity
- Early Closure: The account can’t be closed within the first year. If closed before 3 years, a 2 percent deduction applies. After 3 years but before 5 years, a 1 percent deduction is made. Early closure requires submission of the necessary form at the post office.
- Maturity: After 5 years, the account can be closed by submitting the required documents at the post office. In case of the account holder’s demise before maturity, the amount is refunded to the nominee/legal heirs, with interest paid up to the month before the refund.