INTRODUCTION

What Is an Investment?
An investment is an asset or item acquired with the goal of generating income or
appreciation. In an economic sense, an investment is the purchase of goods that are
not consumed today but are used in the future to create wealth. In finance, an
investment is a monetary asset purchased with the idea that the asset will provide
income in the future or will later be sold at a higher price for a profit.

Understanding Investment:
Investing is putting money to work to start or expand a project - or to purchase an
asset or interest - where those funds are then put to work, with the goal to income
and increased value over time. The term "investment" can refer to any mechanism
used for generating future income. In the financial sense, this includes the purchase
of bonds, stocks or real estate property among several others.

What is post office investment: Post Office Monthly Income Scheme is a scheme in
which you invest a certain amount and earn a fixed interest every month. As the
name suggests, you can invest in this from any post office.
 Comparison of the various Post office savings schemes.

Scheme Interest Rate Minimum Maximum Eligibility Tax Implications

Investment Investment

Post Office 4% per annum – Rs 20 No limit Resident Tax free Interest up to Rs 50,000
Savings (p.a.) Indian,
from financial year 2018-19
Account – Non- Minor
Cheque and
Facility Rs Majors
50

Post Office First year – 7% p.a. Rs 200 No limit Individual Tax benefits up to 5 years
Time Deposit
Second year -7% under section 80 C on deposits
Account (TD)
p.a.
Third Year – 7%
p.a.
Fourth Year –
7.8% p.a.

Post Office 7.3 % per annum Rs 1500 For one Individual Interest earned is Taxable & No deduction under
Monthly payable monthly account Deposits made.
Income holder Rs 4.5
Scheme lacs and
Account joint account
(MIS) holders Rs 9
lacs

Senior Citizen 8.7 % p.a. Rs 1000 Maximum Individual TDS to be deducted on interest earned for more
Savings (Compounded deposit over of age> than Rs 50,000 p.a.
Scheme Annually) the lifetime 60 years
(SCSS) or age
>55 years
 allowed at who have
Rs 15 lacs opted for
VRS or
Superann
uation

15 year 8.0 % p.a. Rs 500 per Rs 1.5 lacs Individual Tax rebate under section 80C for deposits .
Public (Compounded financial per financial
Provident Annually) year year
Fund Account
(PPF)

National 8.0 % p.a. Rs 100 No Limit Individual Tax rebate under section 80C for deposits
Savings (Compounded
(maximum Rs 1.5 lacs pa)
Certificates Annually)
(NSC)

Kisan Vikas 7.7 % p.a. Rs 1000 No limit Individual Interest is taxable but no tax on the
Patra (KVP) (Compounded (Adult)
amount received on maturity
Annually)

Sukanya 8.5 % p.a. Rs 250 per Rs 1.5 lacs Girl Child Investment (up to Rs 1.5 lacs exempt under Section 80
Samriddhi (Compounded financial per financial – up to
Interest.
Accounts Annually) year year 10 years
from and amount received on maturity is tax free
birth and
1
additiona
l year of
grace
Advantages of the Post Office Investment- Saving Schemes in India :

a. Easy to invest: The saving schemes are easy to enrol in and are best suited for the rural
and as well as the urban investor, anyone who wants to hedge the risk in the portfolio for a
fixed decent return. Their simplicity and availability make these a much-preferred savings
option.

b. Simple procedure to enrol : Limited documentation and proper procedures in post

office ensures that these saving schemes are simple to opt for and safe to be locked onto
as they are also backed by the government.

c. Investments for long-term: The investments in the Post Office Schemes are
more forward-looking and long-term oriented with the investment period
extending up to 15 years for a PPF account. This acts as a huge help in retirement
and pension planning.

d. Tax exemption: Most of these schemes carry with them tax rebates under
Section 80C for the deposit amount. Few of the schemes like
the PPF, the SCSS, the Sukanya Sam Riddhi Yojana, etc. also have the interest
earned amount exempted from taxation.

e. Risk-free & competent interest rates :

Interest rates in these schemes range from 4% to 9% which is also risk-free. There is a
minimal amount of risk involved as this is an undertaking by the Government of India.
Why You Should Not Invest In Post Office Savings Schemes
Post Office Savings Schemes are very popular in small towns though these schemes have lost relevance
in big cities. I remember “National Savings Certificate” popularly known as NSC was most preferred
investment avenue for my parent’s generation

1. Post Office Savings Schemes are linked to Place of Investment: Concept is similar to Home Branch
concept of Banks. Assume that you invested in one of Post Office Savings Schemes say Monthly
Recurring Deposit in Worli Post office. Now, you can operate your account only through Worli Post
Office. In case you shift from Worli to Chembur then you need to get your account transferred from
Worli to Chembur Post Office. It’s a manual activity and might take months or in some cases years.
Reason every Post Office has deposit targets and it is not in the interest of Post Office to transfer
deposit account.

2. Post Office Savings Schemes are like Currency Notes: If Post Office Savings Schemes like NSC or
Kisan Vikas Patra carry name of the investor but in case Post Office Savings Schemes certificate is lost,
stolen or damaged then investor need to run from pillar to post to claim his/her investment that too
without much success. If documents are stolen by any thief with little brains can withdraw your
investment easily.

3. Post Office Savings Schemes are not digitized: Unlike other investment avenues or schemes like
Mutual Funds, Equity, Gold etc it is not possible to operate your Post Office Savings Schemes account
online. Because of less technological development you cannot track your account or invest online and
to keep your passbook updated all the time by standing in post office queues for hours. In this internet
age no one prefer Stone Age mode of operation.

4. Unfriendly Post office Staff: No offence to anyone but in my opinion, Post Office staff is very
unfriendly. They treat their customers as if they are doing some big favor to customer. Despite being
PSU State Bank of India and Bank of Baroda has done a commendable job in this regard. Post Office
staff should be trained to be more customer friendly and professional in their approach. So customer
feel good and they encourage others to invest in the post office scheme

5. Post Office Agents Rule the Roost: If you have ever visited Post Office then you can co-relate what
I am trying to convey. When I visited one of Post Office in Mumbai to open RD account, 5-6 agents
Gheraoed me. Somehow I reached RD counter and to my surprise Post Office employee suggested me
to open the RD account through Post Office agent. Post Office agents receive commission for all Post
My Investment: Post office RD is basically a monthly investment for a fixed period of 5
years with a interest rate of 7.20% per annum (compounded quarterly). On the completion
of the fixed tenure of the five years, RD account with Rs. 500 where I am going to make
investment every month will fetch me Rs.36,156.88 maturity amount will get in my hand.
Also I am going open to an joint account with my father on the completion of the fixed
tenure of the five years, RD account with Rs. 5,000 monthly then we get maturity amount of
Rs.3,68,000.00.

Conclusion :
The study discloses that Post Office Savings Bank in India differentiates its offer by building a
unique bundle of competitive advantages. Majority of the respondents invest in post office
schemes for the purpose of the safety and security.
Recurring and fixed deposits offered by Post office offers good interest rates, which are more
or less in line with bank rates. Yes, some private banks offer high interest rates, however
looking at the safety offered by the post office, these post office small saving schemes are
definitely attractive.

The only problem lies is that it is not taking strong steps to deliver and communicate the
desired position to target customers.

To conclude, we can say that the saving instrument of post office is of great significance on:
1.Increase the level of economic condition of the investors. 2.Get tax benefit. 3. Promoting
economic growth. 4.Provide safety and security. 5.To get more returns
TITTLE: POST OFFICE REPORT

SUBMIITED: SURAJIT SANTRA

NAME: SURAJIT SANTRA

CLASS: TYBMS

ROLL NO: 57

ACEDAMIC YEAR: 2019-2020

COLLEGE NAME: VK KRISHNA MENON COLLEGE