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Since November 2018, Post Office Investments have become online, allowing investors to access their accounts anytime. They will no longer need to visit the Post Office to deposit or withdraw money. Many of the popular Post Office schemes, like Public Provident Fund, National Savings Certificates, Time Deposits, Kisan Vikas Patra, and Recurring Deposits, etc. can now be managed online. These services can be availed by logging on to the Department of Post (DOP) 'Online Banking Services.'
With the help of these online services, investors can complete routine services, like viewing account summary, viewing transactions, initiating fund transfer, and managing payees, etc. directly from their computers and phones.
You can visit the website of the Post Office, or the mobile app for internet banking to avail this service. The online services also allow the user to make deposits in their RD and PPF account, allowing to withdraw from the PPF account and also request for a loan. Withdrawals on a PPF account are restricted, and the online services will inform you regarding how much withdrawal is possible at a given time.
It is easy to register for the Post Office Online Services. Before opening an account, a request form for online banking needs to be filled. It can either be taken from the Post Office or downloaded from their website. Then, the filled form needs to be submitted at the Post Office with the required documents.
Once the form is submitted, and the registration process is complete, an SMS is sent to the applicant on their registered mobile number. After receiving the SMS alert, the applicant is required to open the 'Post Office Online Banking' on the website and select 'New User Activation.' For configuring this, the applicant needs to have their Customer ID, CIF ID, and account ID available.
As a next step, all the necessary details need to be provided, and internet banking is configured. Once done, the applicant can start using the Post Office Online Banking Facility and manage all their Post Office Investment Schemes from the comfort of their homes. They no longer require to visit the Post Office Branch and stand in long queues to get their work done.
Not everyone can avail the online Post Office Investments, and certain pre-requisites are listed before one can register for the service. Before registering for the online service, the applicant must fulfill the following requirements.
The applicant requesting for the Online Post Office Services should first ensure that they have a Post Office Savings Account. The savings account can either be a single account or a Joint B Account. An applicant holding a Joint A Account is not eligible for registering for online services.
The applicant should have a valid email id and provide the same while opening the account.
A valid Permanent Account Number is required to be provided to the Post Office.
The Applicant should have a valid mobile number, which they use and will be noted down as the registered mobile number. It is very important that this mobile number is used personally by the applicant as all SMS alerts, OTPs, etc. will be sent on this registered number.
The applicant is required to register for online services by using his or her mother's maiden name.
It is essential to note that people with Joint A Accounts, minors, mentally unstable patients, illiterates, and BO accounts are not eligible for online Post Office Services. This is for their own benefit as they might be duped in revealing their online details under coercion and end up losing their savings.
With Post Office schemes now available online, its reach will expand. As of now, only the lower and middle-income population invested in these schemes owing to their tedious and time-consuming process. As the process becomes streamlined and easier to manage, it will attract the younger population as well, and the pool of investments should increase.
Which is the best Post Office Investment Scheme?
The Post Office offers various investment schemes with different interest rates and deposit limits. Each investment scheme is designed to meet certain requirements and has its own pros and cons. The decision to choose one investment scheme over another lies with the investor and what they are looking from a particular investment. The various schemes currently available with the Post Office are Public Provident Fund (PPF), Time Deposits, Senior Citizen Savings Plan, Post Office Monthly Investment Plan, Sukanya Samriddhi accounts, and Recurring Deposits, etc.
Here are the salient features of each Post Office Investment Scheme that should help you understand which one is suitable for your needs.
This is a recent scheme and is aimed mainly for young girls. Under this scheme, an account can be opened by a legal or natural guardian in favour of a girl child. Minimum deposits required in this account are Rs. 1,000 up to the maximum of Rs. 1,50,000 in one financial cycle.
This account requires deposits in the multiples of Rs. 100 and can also be made as a lump sum or monthly, quarterly, etc. Once the account holder, i.e. the girl who holds the account reaches the age of 18, she can withdraw up to a maximum limit of 50 % of the amount in a given financial year. The account can also be closed after the account holder reaches 21 years of age. The interest rate earned on this account is 8.4 % per annum effective from 01-07-2019, which is compounded yearly based on the amount at the end of each financial year. It is a good scheme for saving for educational expenses for the girl and promotes further education.
Public Provident Fund or PPF is one of the most popular Post Office Schemes which is availed by millions of Indians in a bid to save money for the long term. Under a PPF scheme, you need to deposit money in the PPF account once a year. The minimum deposit amount starts from Rs. 500 and is limited to Rs. 1,50,000 in a given financial year. Deposits can also be made in a lump sum or in instalments which should not exceed 12 in a year.
The PPF account has a fixed maturity period of 15 years and can be further extended after the end of 15 years for another five years. One of the main reasons the PPF account is preferred by Indians is that it helps in tax saving. The deposit amount under PPF is exempted from tax under Section 80 C. Further, the interest earned and the final amount after maturity is also exempt from tax. The prevailing interest rate on Public Provident Funds is 7.9% and is compounded annually.
The only disadvantage of a PPF account is that it is not liquid and the money cannot be withdrawn before completion of five years. A loan can be availed on the basis of a PPF only from the third till the sixth year, post which it is not allowed. Thus, a PPF account ensures that your savings remain untouched and help you when you really need it.
The Post Office offers a special saving scheme, especially for the senior citizens between the age group of 55-60 years. This account can be opened by senior citizens falling under the age requirement and have either recently retired or have chosen VRS. One of the conditions for opening this account is that it should be opened within one month of receiving retirement, and the amount deposited should not be more than the amount of retirement benefits received.
The account allows for only one deposit in the multiples of Rs. 1000 and should not exceed Rs. 15,00,000. The interest rate for the Senior Citizens Saving Scheme is 8.6 % and starts accruing from the time the account is opened. Interest is paid quarterly on 31st March, 30th June, 30th September, and 31st December. This helps in acquiring regular income for senior citizens, especially after their retirement.
The account can be closed before the maturity, but a penalty is applicable. If the account is closed within a year of opening, 1.5 % of the total deposit amount is deducted. If the account is closed within two years after opening the account, 1% of the deposit amount is deducted as fine. This is a good scheme for senior citizens, and now with the online Post Office services, senior citizens can manage their accounts easily from their phone. They no longer need to travel all the way to the Post Office just to make a withdrawal.
The Monthly Income Scheme is akin to a Systematic Investment Plan or SIP where a fixed amount of money is invested monthly, and a rate of return is earned on that. It is different than a Recurring Deposit, as the deposits have to be done in multiples of Rs. 1500. A customer can invest maximum Rs. 4.5 lakhs in a single account and Rs. 9 lakhs in a joint account. The interest rate earned on this account is 7.6 % and is payable monthly. The Post Office Monthly Income Scheme Account can be closed before maturity, but a fee of 2% of total deposit account is deducted from the account, if it is closed between the first and the third year. If the account is closed after the third year, a 1% fee of the total deposit amount is charged.
In a Post Office Recurring Deposit Account, monthly payments starting from Rs. 10 need to be made. The deposits should be in multiples of five and should be done every month. For each month that the deposit is missed, a default fee of Rs. 0.05 for every Rs. 5 is levied. If the deposit is missed for four consecutive months, the account is made inactive and can be revived within two months by submitting an application. If the application is not submitted, the account is seized, and no further deposits are allowed in the account. An interest rate of 7.2 % is offered on the recurring deposit account and helps in regular saving while also creating wealth.
Can I Pay Post Office PPF Online?
Yes, with the introduction of online services for Post Office schemes like Public Provident Fund, it is now possible to pay into your PPF account online via the e-banking site of the Post Office. To use the online Post Office scheme services, the customer should be a registered user and should have submitted all required KYC documents. Also, the PPF account cannot be opened online and still requires one to fill a paper form. Once the account is open and functioning, further payments to the PPF account can be made online.
Can I Pay Post Office RD Online?
Yes, the monthly instalments on the Post Office RD can be paid online, but the applicant must have a registered Post Office Banking Online account with a registered mobile number. Also, please note that an RD account can be opened only with cash and thus, cannot be completed online. Once the account is open and activated, further deposits to the RD account can be made online via logging on to the website.
How Can I Open a Post Office RD Online?
A Post Office RD cannot be opened online, though future deposits in the RD account can be made online using the Post Office Online services. For opening a Recurring Deposits account, the applicant needs to visit the nearest Post Office and fill a form along with giving an initial deposit amount in cash. Once the account is activated, it would reflect on the online Post Office portal, subject to the applicant having a registered online Post Office account.