CHAPTER NO: 1
INTRODUCTION
CHAPTER NO: 1
INTRODUCTION
POSTAL SERVICES IN INDIA
India possesses the largest postal network in the world with 155,000 post offices
spread all over the country as on March 31, 2001, of which 89 per cent are in the rural
sector.
Post offices in India play a vital role in the rural areas. They connect these rural areas
with the rest of the country and also provide banking facilities in the absence of banks
in the rural areas.
The modern postal service in India is more than 150 years old. In 1854, the Post
Office in the Province of Sindh, (then in British India), made postal history, when
India became the first country to issue postage stamps.
In October 1854, all the post offices of Indian subcontinent came under centralized
control. In the same year Railway Mail Service was established and India had a
network of 701 post offices across the continent. In 1911, India achieved another
"first" when a biplane from Allahabad to Naini flew with 6500 pieces of mail. The
flight was the first official Air Mail in the world.
After independence, the Indian government broadened the vision of the postal system
to reach the entire population of the country.
Today Indian postal system has a reach that ranges from arid deserts of Rajasthan and
Kutch to the icy heights of Laddakh. India has the highest post office in the world in
Sikkim at a height of 15,500 feet (postal code - 172114).
Indian postal service provide many facilities like - general or registered mail, parcel
post, speed post, express post, e post and special courier service known as EMS-speed
post.
They also offer a number of post office savings schemes like National Savings
Certificate, Kisan Vikas Patra, Recurring Deposits and Term Deposits.
Kisan Vikas Patra
Kisan Vikas Patra (KVP) is a saving instrument that provides interest income similar
to bonds. Amount invested in Kisan Vikas Patra doubles on maturity after 8 years & 7
months.
Monthly Income Account
Post Office Monthly Income Account is meant for those investors who want to invest
a lump sum and earn interest on monthly basis for their livelihood.
National Savings Certificate
National Savings Certificate, popularly known as NSC, is a time-tested tax saving
instrument that combines adequate returns with high safety.
Public Provident Fund
Public Provident Fund, popularly known as PPF, is a savings cum tax saving
instrument. It also serves as a retirement planning tool for many of those who do not
have any structured pension plan covering them.
Recurring Deposit Account
Recurring deposit account is a systematic way of saving money. The scheme is meant
for those investors who want to deposit a fixed amount regularly on monthly
Post Office Saving Account
Post office saving account is similar to a savings account in a bank. It is a safe
instrument to park those funds, which you might need to liquidate fully or partially at
very short notice.
Time Deposit Account
Post office time deposit account is just like the bank fixed deposit account. These time
deposits are meant for those investors who want to deposit a lump sum for a fixed
period
CHAPTER NO: 2
CONCEPTUAL DATA
CHAPTER NO: 2
CONCEPTUAL DATA
Post office small saving schemes have been very popular among our older generation,
despite its not so attractive interest rates. Post office could not also embrace technology. You
can’t invest in post office saving scheme online. Post office has not shifted to core
banking. Still, many of us prefer post office due to the security and its reach. As government
runs post offices, your money remains with the government. This gives you the peace of
mind. Also you can find post offices at the remotest place. There are 1.54 lakh branches of
post office in India. Even the interest rates of post office are not the highest but of course at
competitive rates.
Every year in the March Government of India fixes interest rate of all the small saving
schemes.
Post Office Saving Schemes which give Tax Benefit
Government of India has given tax benefit to the many post office small saving schemes.
Public Provident Fund, National Saving Certificate, Senior citizen saving scheme, 5 yr Time
Deposit are such scheme. Among these NSC is most popular.
National Saving Certificate (NSC)
National Saving Certificate Scheme is a similar to fixed deposit. You get a
printed certificate (like bonds) of different denominations.
NATIONAL SAVING CERTIFICATE
Interest Rate Min Investment Max Investment Period
8.5%, 8.8% Rs 100 No Limit 5, 10 Yrs
Investment
Tax Benefit Yes Return
Maturity
NSC is only for 5 and 10 years.
The interest rate is fixed for a total duration of maturity.
The interest rate is compounded half yearly, but accrued annually.
National Saving Certificates are available in the denominations of Rs 100, Rs 500,
Rs 1,000, Rs 5,000 and Rs 10,000
You can take a loan against the NSC from any bank.
Online investment facility is not available.
Taxation of NSC
This Scheme gives you a tax benefit under 80C. You can claim tax rebate up to
investment of one lakh.
Interest earning of every year can be also claimed for tax rebate under 80C.
Total interest at the end of maturity period would be taxable.
TDS is not applicable you have to add the return in your total income.
Public Provident Fund (PPF)
Public Provident Fund has been one of the most popular saving schemes of post office. But
today it is losing charm because it does not give online deposit facility.
PUBLIC PROVIDENT FUND
Interest Rate Min Investment Max Investment Period
8.7% Rs 500 Rs 1,00,000/yr 15 Yrs
Investment
Tax Benefit Yes Return
Maturity
PPF is a very popular scheme and one of the best tax saving investment.
It is for the duration of 15 years. You can invest at your wish during this period.
You have to invest minimum once in a year.
You can invest maximum 12 times in a year.
Loan and premature withdrawal facility is available with conditions.
Post offices don’t give online investment facility or electronic fund transfer. If
you want online facility then you can open a PPF account in SBI or any other
government banks. Some Private Banks also give online PPF facility.
Taxation of PPF
You can get a tax rebate on the investment of PPF.
Maturity amount is also tax-free.
Every investment in the PPF scheme is entitled of tax rebate under 80C.
Senior Citizen Saving Scheme
Senior Citizen Saving scheme is designed to the need of retired person. Normally people
gets lump sum amount of employee provident fund. Such employee can put their money in
SCSS and can get regular income in every 3 months.
SENIOR CITIZEN SAVING SCHEME
Interest Rate Min Investment Max Investment Period
9.2% Rs 1000 Rs 15,00,000 5 Yrs
Investment
Tax Benefit Yes Return
Maturity
As its name denotes this scheme only for senior citizens who has completed 60 years
of age.
You can invest a lump sum in this scheme.
You can open joint account with your spouse as well.
You can have more than one account.
Investment should be in the multiple of 1000.
The duration of this account is 5 years. This can be extended further 3 years.
Interest is calculated quarterly. The government pays interest after every quarter.
Payment dates are 31St March, 30th June, 30th September, and 31St December
If you have saving account in the same post office, then interest is credited directly
into the account. Else you can get post-dated cheques.
You can close your account after one year. But the government will deduct some
amount according to below formula.
After one year– up to 2 years – 1.5% of the Balance Deposit Amount.
After 2 years – 1% of the Balance Deposit Amount.
The maximum investment limit for this scheme is 15 lakh
Banks also gives the facility of the senior citizen saving scheme.
Taxation of Senior Citizen Saving Scheme
You can claim tax rebate under 80C.
Interest earning is taxable. TDS is deducted if interest is more than 10,000.
Post Office Time Deposit Account
This is similar to fixed deposit in bank. Time deposit of 5 years is eligible for tax
rebates under 80C.
Interest would be taxable.
Details of time deposit are given below
Post Office Small Saving Scheme for Senior Citizen
Except Senior Citizen Saving Scheme (SCSS) there are other post office small saving
schemes which are beneficial for senior citizens.
Post Office Monthly Income Account Scheme
Monthly Income Scheme gives you regular monthly income. To avail maximum benefit of
this scheme you should open joint account with your spouse.
MONTHLY INCOME ACCOUNT SCHEME
Interest Rate Min Investment Max Investment Period
8.4% Rs 1,500
Rs 4,50,000 (Single)
Rs 9,00,000 (Joint) 5 Yrs
This scheme gives you a regular monthly income. It is similar to an annuity plan.
Minimum investment in MIS is Rs 1500.
The maximum you can invest 4.5 lakh in single account and 9 lakhs in a joint account.
Your investment should be in the multiple of 1500.
The account can be transferred from one post office to another.
You can open any number of accounts.
If you have saving account in the same post office, then interest would deposited in
saving account, else government pays monthly interest by post-dated cheque or ECS.
You can withdraw your money before the 5 year period, but the post office will
charge a penalty. If you withdraw before 3 years, then 2% of the amount will be
deducted. After 3 years deduction will be 1%.
Fixed (FD) and Recurring Deposit (RD) in the Post Office
You can enjoy the benefit of fixed and recurring deposit benefit in the post office as well.
Fixed deposit is called Time Deposit in the post office.
Time Deposits
FIXED DEPOSIT IN POST OFFICE
Interest Rate Min Investment Max Investment Period
8.4% Rs 200 No Limit 1, 2, 3, 4 Yrs
8.5% Rs 200No Limit
5 Yrs
Post office gives many options of a time deposit. You can open time deposit for 1, 2,
3, 4, and 5 years.
It gives different interest rates for every duration. However, recently government is
giving similar interest rate for 1, 2, 3, and 4 years.
You can open any number of accounts.
You can transfer an account from one post office to another.
2,3 & 5 your account can be closed after 1 year at a discount.
The account can also be closed after six months. In this case you will get an interest
rate of saving account (4%).
Recurring Deposits
Only Recurring Deposits in the post office give you partial withdrawal facility.
RECURRING DEPOSIT IN POST OFFICE
Interest Rate Min Investment Max Investment Period
8.4% Rs 10/Month No Limit 5 Yrs
You can open recurring deposit in the post office for as little 10 rupees per month.
5 years recurring deposit account can be extended for further 5 years.
If you have opened an account before 15 days of the month, then your subsequent
deposit should be also before the 15th of the month. Similarly, if opened your account
after 15th but before the last day of the month, then your subsequent deposits should
be in this period.
One withdrawal up to 50% of the balance allowed after one year.
DISTINGUISH BETWEEN POST OFFICE DEPOSIT AND BANK DEPOSIT
Is post office term deposit is better than bank fixed deposit? Below are the major differences
among these two.
1. Tenure of deposit
Term deposit offered by Post office is available for 1, 2, 3 and 5 years period
Bank fixed deposits are available from 15 days period to 10 years period.
2. Interest rates
Post office deposit rates are between 8.2% to 8.5% p.a.
Bank fixed deposit interest rate varies between 7.5% to 9.25% p.a.
3. TDS
For Post office term deposit, there is no TDS deducted by Post office.
For Bank Fixed deposits, TDS would be deducted on interest.
4. Opening the deposit account
Post office term deposit can be opened only by adult individuals either single or
jointly. Others cannot open the deposit account.
Bank fixed deposits can be opened by any one
5. Safety
Post offices run by Govt. of India, hence term deposits are 100% safe.
Bank fixed deposits does not provide any safety. However investment up to 1 lac in
bank fixed deposits are covered under insurance.
CHAPTER NO: 3COLLECTION OF DATA
AND ANALYSIS
CHAPTER NO: 3
DATA AND ITS ANALYSIS
1. While making an investment, what is your general objective or goal?
A) To be able to generate income B) To ensure growth in my income
C) Appreciation of capital
Objective or Goal Number of Respondents
To be able to generate income 70%
To ensure growth in my income 20%
Appreciation of capital 10%
70%
20%
10%
Objective or Goal
To be able to generate incomeTo ensure growth in my incomeAppreciation of capital
2. According to you, which tool of investment do you generally use?
A) Bank deposits B) Post office plans & schemes
C) Gold D) Other____________
Investment Number of respondents
Bank deposits 50%
Post office plans & schemes 30%
Gold 10%
Other 10%
Bank deposits Post office plans & schemes
Gold Other
50% 30% 10% 10%
Investment
Number of respondents
3. Do you have account in bank?
A) Yes B) No
Account in Bank Number of respondents
Yes 100%
No 0%
Yes No0%
20%
40%
60%
80%
100%
120%
100%
0%
ACCOUNT IN BANK
Number of respondents
4. Which type of account do you have with bank?
A) Saving B) Recurring
C) Current D) Fixed
Type of account Number of respondents
Saving 70%
Recurring 10%
Current 0%
Fixed 20%
Saving; 70%
Recurring; 10%
Fixed; 20%
type of account
Saving Recurring Current Fixed
5. Do you have taken any policy from post office?
A) Yes B) No
Policy Number of respondents
Yes 80%
No 20%
Yes No0%
10%
20%
30%
40%
50%
60%
70%
80%
80%
20%
Number of respondents
POLICY
85%
6. Which type of account do you have in post office?
A) Saving bank B) Fixed deposit
C) Recurring deposit
Type of account Number of respondents
Saving bank 40%
Fixed deposit 30%
Recurring deposit 10%
50%
38%
13%
Number of respondents
Saving bankFixed depositRecurring deposit
7. For what period you have taken the policy?
A) Less than 1 year or 1year B) Less than 3 year or 3 years
C) Less than 5 year or 5 year D) Less than 10 year or 10 years
Period Number of respondents
Less than 1 year or 1year 10%
Less than 3 year or 3 years 10%
Less than 5 year or 5 year 40%
Less than 10 year or 10 years 20%
10%
10%
40%
20%
Less than 1 year or 1year Less than 3 year or 3 yearsLess than 5 year or 5 year Less than 10 year or 10 years
8. From where do you get the information about postal saving scheme?
A) Newspaper B) Agent
C) Internet D) Other
Information Number of respondents
Newspaper 20%
Agent 10%
Internet 30%
Other 20%
Newspaper Agent Internet Other0%
5%
10%
15%
20%
25%
30%
20%
10%
30%
20%
Number of respondents
.
9. What is your main concern while taking postal saving scheme?
A) Tax benefit B) Investment
C) Security D) Other
Main Concern Number of respondents
Tax benefit 0%
Investment 50%
Security 10%
Other 20%
Tax benefit Investment Security Other0%
10%
20%
30%
40%
50%
60%
0%
50%
10%
20%
Number of respondents
Number of respondents
10. Have you suffered from any loss from postal saving scheme or bank?
A) Banks B) Postal offices
YES NO YES NO
Business handled Number of respondents
BANKS(YES) 2%
BANKS(NO) 80%
POSTAL OFFICES(YES) 2%
POSTAL OFFICES(NO) 80%
BANKS(YES)
BANKS(NO)
POSTAL OFFIC
ES(YES)
POSTAL OFFIC
ES(NO)
0%
10%
20%
30%
40%
50%
60%
70%
80%
2%
80%
2%
80%
Number of respondents
11. Which services does satisfy you the most?
A) Bank B) Post offices
Satisfy Number of respondents
Bank 50%
Post offices 50%
Bank Post offices 0%
10%
20%
30%
40%
50%
60%
50% 50%
Number of respondents
Number of respondents
12. According to you which services provider give greater interest rate?
A) Bank B) Post office
Services provider Number of respondents
Bank 60%
Post office 40%
60%
40%
Number of respondents
Bank Post office
DATA COLLECTION
Sample of study:-
The sample for this study consisted of ten respondents. The selected respondents in the age
group of 20-60 years belonged to varied employment, gender and income groups. Convenient
sampling technique was applied in selecting respondents as sample.
Data source:-
The study is based on primary and secondary data.
1) Primary data:-
A self-designed questionnaire consists of first and second part, which deals with the
respondent’s perception, was used for the purpose of primary data collection.
2) Secondary data:-
Secondary data have been collected from the journals, different books and websites.
3) Data analysis:-
The data collected from various sources have been analyzed by using the techniques of
simple percentages, averages etc.
CHAPTER NO: 4
FINDINGS
CHAPTER NO: 4
FINDINGS
The most of the respondents has answered general objective is to be able to generate
income
Most of the respondents use bank deposits
100% of the respondents have account in bank
From the total number of respondents 70% have saving accounts
80% of the respondents have taken policy from post office
The 30% number of respondents said that they have fixed deposit account in post
office
40% have taken policy for the period of less than 5 year or 5 year
Some of them answered that they get information from agent
50% respondents said that their main concern is investment
Most of them answered they are satisfied with a bank
CHAPTER NO: 5
CONCLUSION
CHAPTER NO: 5
CONCLUSION
Post office provides various schemes for safe investment of surplus funds.
However, the return on investment is rather low.
The interest rates are reduced considerably in recent years.
Such trend of lowering of interest rate is applicable to all types of savings schemes in
India.
The postal rules and procedures are lengthy.
Moreover, quick service and personal attention are not given due to inadequate staff,
use of old methods and procedures, etc.
CHAPTER NO: 6
APPENDIX
CHAPTER NO: 6
APPENDIX
ANNEXURE-QUESTIONNAIRE
NM COLLEGE OF COMMERCE & ECONOMICS
Name: ______________________________
Address: _____________________________
Email Id: _____________________________
MobileNumber:_________________
2. While making an investment, what is your general objective or goal?
B) To be able to generate income B) To ensure growth in my income
C) Appreciation of capital
2. According to you, which tool of investment do you generally use?
A) Bank deposits B) Post office plans & schemes
C) Gold D) Other____________
3. Do you have account in bank?
A) Yes B) No
4. Which type of account do you have with bank?
A) Saving B) Recurring
C) Current D) Fixed
5. Do you have taken any policy from post office?
A) Yes B) No
6. Which type of account do you have in post office?
A) Saving bank B) Fixed deposit
C) Recurring deposit
7. For what period you have taken the policy?
A) Less than 1 year or 1year B) Less than 3 year or 3 years
C) Less than 5 year or 5 year D) Less than 10 year or 10 years
8. From where do you get the information about postal saving scheme?
A) Newspaper B) Agent
C) Internet D) Other
9. What is your main concern while taking postal saving scheme?
A) Tax benefit B) Investment
C) Security D) Other
10. Have you suffered from any loss from postal saving scheme or bank?
A) Banks B) Postal offices
11. Which services does satisfied you the most?
A) Bank B) Post offices
12. According to you which services provider give greater interest rate?
A) Bank B) Post office
BIBILIOGRAPHY
www.indiapost.gov.in
www.moneycontrol.com
www.onemint.com
www.investmentkit.com
www.webindia123.com