If you’re wondering where to invest your money for five years, you may be overwhelmed by the investment avenues proliferating the market today. Today’s investment opportunities are endless for mutual funds, bonds, stock options, and post office investment schemes. What you choose to invest in should depend upon your goals and the time frame you are willing to devote to your investment.
In this regard, post office investment schemes hit the right chord. Not only do they have a tenure of 5 years, but they provide a fixed monthly income. Continue reading to understand what post office monthly investment schemes are and the benefits they provide.
A post office investment scheme is designed to help you accrue good investment returns. This scheme has a holding period of 5 years and provides an annual interest rate ranging from 4 to 8 per cent. With it, you can avail of a fixed monthly income. You can help with this scheme at any of the post offices located across the country.
Now, if you hail from an urban part of the country, the chances of your having heard of a post office investment scheme may be slim. This is because fixed deposits and alternative debt options are more popular sources of accruing monthly incomes. In fact, most urban dwellers may choose to park their money in these investment avenues.
That said, while Indian post office investment schemes aren’t as popular, they provide investors with a wide range of benefits. In fact, as the Indian post offices fall under the governance of the Ministry of Finance, they hold greater credibility in comparison to other investments. To further cement their credibility, you should keep in mind the fact that the post office continues to serve as one of the country’s most prominent and largest banking service providers.
Here are some of the more prominent benefits of investing in postal investment schemes.
Investing’s as Easy as your ABCs - It is easy to invest in such schemes, and this is further compounded by the fact that they require limited documentation. The fact that the government upholds them enhances their credibility. By following a few simple steps at your local post office, you can invest in these safe investments that provide fixed returns.
Access Them Across the Country – Rural as well as urban investors can take advantage of post office schemes as post offices are located across the country. These schemes have been strategically designed to be simple so that their benefits can be reaped by rural and uneducated people also. This makes them the preferred savings route for a large section of the country’s population.
Avail Benefits Across the Long Term – These investments encourage you to look to the future as they long term oriented. They can serve as good retirement or pension plans and can be extended for a period of up to 15 years, provided you have a public provident fund (or PPF). Holding such an investment can diversify your portfolio and gain access to risk-free and fixed returns.
Risk-free + Viable Interest Rates - The interest rates applicable to post office savings schemes fall between 4 to 8 per cent. Not only are they risk-free, but these rates are highly competitive against those offered by banks. Since the government of India regulates these investments, minimal risks are involved.
Investors Rejoice with Customised Offerings – Investors can take advantage of the wide range of investments offered by the Indian Post Office that are targeted to meet different investor requirements. These products have different tax implications, investment horizons, and anticipated returns.
The following features stand out when looking at the post office monthly investment scheme.
Here’s a list I’ve jotted down of post office investment schemes available in India.
If you wish to apply for a post office monthly investment scheme, simply follow the below steps.
Step 1. Visit the nearest post office.
Step 2. Get the form needed to open the appropriate account from the post office, or download it from the official website for the Indian Post Office.
Step 3. Fill out the form with the necessary details and submit it along with your KYC and other necessary documents.
Step 4. Deposit the amount of your choice into your account to complete the process of enrolment.
Documents Needed to Apply for a Post Office Investment Scheme
Use the following documents to apply for a post office investment scheme.
Although post office investment schemes may not be well known, they should be taken advantage of. They provide investors with competitive interest rates and are characterised by the ease with which they can be invested. As far as investments go though, Fi provides investors with the tools they need to make wise investment decisions. Visit the website today to learn more.
A1. No one scheme is the best among those offered by the post office as different schemes carry different benefits. The scheme you ultimately invest in should depend upon your goals, the time frame you are willing to allocate, the interest applicable and the caps on the amount you invest.
A2. Fixed deposits at post offices pay interest on an annual basis; however, compounding occurs each quarter. At an interest rate of 6.7 per cent, such an investment would take ten years and five months to double in value.
A3. The interest rates applicable to post office savings schemes fall between 4 to 8 per cent.
Q4. Which post office scheme has the highest interest rate?
A4. The Sukanya Samriddhi Account has the highest interest rate, which amounts to 7.6 per cent. The Kisan Vikas Patra account has an interest rate of 6.9 per cent, where there is no limit on the amount invested each year. That being said, it is important to understand that investors have an INR 1.5 lakh cap on the amount they can invest in this scheme each financial year.