An investment scheme where an individual can open account with Rs 100 but has to deposit minimum of Rs 500 in a financial year and maximum of Rs 1.5 lakh. Deposits can be made in lump-sum or in 12 equal instalments.
- There is no provision for joint account.
- Nomination facility is available at the time of opening and also after opening of account. Account can be transferred from one post office to another.
- The subscriber can open another account in the name of minors but subject to maximum investment limit by adding balance in all accounts.
- Maturity period is 15 years but the same can be extended within one year of maturity for further 5 years and so on.
- Maturity value can be retained without extension and without further deposits also.
- Premature closure is not allowed before 15 years.
- Deposits qualify for deduction from income under Section 80C of the Income Tax Act, 1961.
- Interest is completely tax-free.
- Withdrawal is permissible every year from 7th financial year from the year of opening account. Loan facility can be availed by the account holder from the third financial year.
Source: India Post