POSTAL SCHEMES - FAQ

The following are frequently asked questions by the investors, agents and others involved in mobilization of savings and answers to these FAQs are as under:-

1.Why a person should invest in National Savings Products ?

Ans: The investment in NS Products which are the products of Ministry of Finance, Government of India, has a sovereign guarantee and therefore NS products are fully secured and safe. The rate of interest offered on NS products are quite attractive as compared to other schemes in the financial market. The important aspect is that 100% of the collections made in the state is invested in the securities floated by the state govt. as a loan by the Govt. of India on long term basis which is used by the state govt. for their developmental activities in the state.

2. deposits made in excess of the prescribed limit i.e. Rs.70,000/- in a PPF account ?

Ans : Accountholder is not entitled for interest on any amount deposited in excess of Rs.70,000/- in a financial year in the PPF account.

6. If a person opens PPF account in the name of individual and also in the name of a minor(s), how the limit of deposit is determined?

Ans : The maximum amount of Rs.70,000/- can be deposited by a person in a financial year in a PPF account opened in his name and in the name(s) of a minor(s) taken together.

7. Whether the investment in N.S.C., KVP, POMIS, POTD earns post maturity interest?

Ans : The post maturity interest on all the above schemes will be paid up to maximum period of two years from the date of maturity at the POSA rate applicable from time to time.

8. If the investment is made in NS products by cheque, what is the date of deposit ?

Ans : In case of deposit by cheque in the NS products, except PPF and R.D., the date of deposit will be the date of realization of cheque. However, in the case of PPF and R.D., the date of deposit will be treated as date of presentation of cheque.

SENIOR CITIZEN’S SAVINGS SCHEME

1. Can a joint account be opened with any person under the Senior Citizen’s Savings Scheme?

Ans : The account can be opened jointly with the spouse only.

2. What should be the age of the spouse in the case of Joint. Account?

Ans : In the case of Joint account, the age of first applicant /depositor is the only factor to decide the eligibility to invest under this scheme. There is no age bar/limit for the 2nd applicant/joint holder (i.e. spouse).

3. What is the share of the joint account holder in the deposit in SCSS ?

Ans : The share of the joint account holder under the scheme is attributed to the first applicant/depositor only. Question of any share of the 2nd applicant/ account holder (spouse) therefore does not arise.

4. In case, the depositor does not close the account on maturity and also not extend the account for a period of three years within a period of one year, how the interest is to be calculated/paid after the maturity period ?

Ans : The account shall be treated as matured and post maturity interest at the rate applicable to the deposits under POSA from time to time shall only be admissible for the period beyond maturity in accordance with the rules. The amount of excess interest paid (at higher rate applicable to deposits under SCSS) after the maturity shall be deducted.

5. Whether TDS will be deducted on the interest paid on SCSS ?

Ans : The tax will be deducted at source in respect of interest payable under SCSS. However, senior citizen can avail the facility of furnishing the form no. 15-H under income tax rules who is a resident in India and of the age of 65 years or more.

6. Can SCSS account be transferred from one deposit office to other?

Ans : A depositor may apply enclosing the pass book thereto for transfer of his account from one deposit office to another provided that where deposit is Rs.1 lakh or above transfer fee of Rs.5/- per lakh on deposit for the first transfer and Rs.10/- per lakh of the deposit for the 2nd and subsequent transfers shall be payable by the depositor.

7.What is the period up to which post maturity interest can be given?

Ans : In case, the account is not closed on completion of the five years, maturity period and also not extended under rule 4(3), post maturity interest at the POSA rate from time to time shall be paid till the end of the month preceding the month of closure. No time limit has been prescribed.

Agency System

1. Whether the services of National Savings Agent’s are available to the investors?

Ans. Yes. Except in case of Post office savings Bank account. However investors in their own interest should either tender Cheque drawn in favour of the deposit accepting agency i.e. post office or bank to the agents or obtain proper Agent’s Receipt as a token of receipt from the agent.

2. How an individual can become agent of NSI ?

Ans: There are three types of agents operative in the National Savings Agency system namely ,
1. Standardised Agency System(SAS)
2. Mahila Pradhan Agency System(MPKBY)
3. Public Provident Fund Agency System(PPF)

The work relating to appointment, renewal and servicing of the agents has been transferred by Govt. of India to the respective State Governments and in most of the cases District Collector/Dy. Commissioner is the appointing authority in their respective area of operation. The procedure regarding appointment also varies from State to State depending on their requirements of agents and any person interested to work as agent in National Savings can approach the concerned District Magistrate / Dy. Collector/Director Small Savings of the respective state, Regional Director, NSI, of the concerned area.

3. What is the procedure for payments of commission?

Ans: Agents under National Savings are paid commissions at the rate of 1% in SAS and PPF agency system & 4% in MPKBY Agency System which is applicable in case of ladies only and they are authorized to canvass only Recurring Deposit Scheme. The payment of commission is made by the deposit accepting authorities at source. However, in case of deposit canvassed under Senior Citizen Savings Scheme, the commission is payable only 0.5% to women/men agents working under SAS agency.