The Indian postal service offers a number of savings and investment plans. The Post Office Recurring Deposit (PORD) account offered by the Indian post office is one of its most famous services. Other saving plans offered by the Indian postal service are: national savings certificates, public provident funds, kissan vikas patra, and monthly income schemes.
The maturity period of PORD’s is 5 years. The rate of interest for a PORD investment is 7.50% quarterly compounded. For example, a deposit of Rs.10 each month for five years will make the interest of Rs.128.90/-, with the principal being Rs.600/-. After the maturity period of 5 years, the account holder can continue the account for more 5 years at the same interest rate.
Individuals age 18 or older who are interested in investing in the scheme can go to any head post office or sub post office and open a recurring deposit account. Two adults can also open a joint PORD account with the post office.
In that case, the matured account is payable to either party, or the parties jointly. A minor of age 10, or a guardian of a minor or a person of unsound mind can also open a PORD account.
An investor can open a PORD account with a minimum balance of Rs.10/-. Subsequent monthly investments must be the minimum of Rs.5/-. The amount that is deposited to open the account becomes the account’s denomination. The deposits made each subsequent month must be the same as the initial deposit, and must be made before the end of that calendar month.
Premature withdrawals of the PORD account are possible after 3 years from the account opening date. The account holders can also take loans of the worth of 50% of the deposits after the account has been operating at least for one year.
There is provision for advance deposits also and the investors can even enjoy special rebates on those deposits. A rebate of Rs.10/- for the account having denomination of Rs.100/- can be granted for the deposits of six or more and up to eleven in a month. For the advance deposits of twelve or more, the depositors can enjoy the rebate of Rs.40/- for every deposit of Rs.100/- denomination.
Last Updated on : 3rd August 2013