Forgotten Schemes
Savings In The Red Box
India Post still serves a wide population with its
trusted savings schemes, says Pritam Goswami
W
Rural focus
hen was the last
time you’ve posted a
letter in a red letter
box or invested
in a post office scheme? In the last
decade or so, the India postal service
has seen a rapid decline in both
popularity and usage. With e-mail
and social media ever becoming part
of our lives, distances have blurred
as communication between people
has become instantaneous.
An institution set up in mid
nineteenth century British era,
India Post had expanded its
network over the last 150 years to
emerge as one of the most efficient
communications systems of the
country. It was initially set up for
military communication, but went
on to become the third largest
organisation, after defence and
Indian railways. Even today, despite
falling postal revenue, it operates 1.5
lakh post offices in different parts,
mostly in rural areas, and has more
than six lakh employees. What is
little known, however, is that the
postal network remains the nation’s
oldest savings bank.
Post Office Schemes
While losing out to private
competitors in the savings and
investment business, India Post
continues to serve as an integral link
to rural India. Although post office
schemes like recurring deposits
have declined in urban areas, the
department has more than 300
million accounts, and maintains
a balance of more than `6,00,000
crore. The organisation also
makes payments to one of India’s
largest social security program,
the Mahatma Gandhi National
Rural Employment Guarantee Act
(MGNREGA).
Various other schemes like the
Kisan Vikas Patra and Sukanya
Samriddhi are popular in the
rural parts. Kisan Vikas Patra or
KVP, which was re-launched by
the National Democratic Alliance
government, doubles the money
after a period of 118 months.
Sukanya Samriddhi is an exclusive
plan for the girl child offering a
better rate of interest than many
other schemes. The account can
be opened by the parents or legal
Interest Minimum
Rates
Deposit
Investment
Period
Savings Deposit (SD) 4.00% `20 NA
2 Year Time Deposit (TD) 6.70% `200 2 Years
5 Year Recurring Deposit (RD) 6.90% `10 Month 1 to 10 Years
5 year Monthly Income Scheme (MIS) 7.30% `1500 5 Years
Kisan Vikas Patra (KVP) 7.30% `1000 9 Years 5 Months
Sukanya Samriddhi Account
Scheme (SSAS) 8.10% `1000 21 Years
Source: indiapost.gov.in/interest rates for 2017-2018
guardian of the girl child, until she
attains ten years of age. The Post
Office Monthly Income Scheme
(POMIS) is yet another alternative
plan, which offers a 7.3 per cent
interest per annum payable monthly.
Jaswant Singh, an auto driver in
Delhi, says that he trusts his post
office investments. “It is safe and I
need not worry. I don’t trust private
companies much, as I keep reading
about frauds in the newspaper.”
One of its earliest schemes, the
Postal Life Insurance Scheme,
was introduced in 1884. Its rural
counterpart, the Rural Postal Life
Insurance (RPLI) scheme was
launched more than a century
later, in 1995, under the leadership
of former Prime Minister P.V.
Narasimha Rao. These schemes were
undertaken for the benefit of central
and state government employees,
local bodies, civil and military
personnel, among others.
Even though the behemoth is
losing steam and financial autonomy,
India Post offers secure interest rates
backed with government guarantee.
Financial inclusion
With the aim of improving its
services, the department has
undertaken several initiatives.
DARPAN (Digital Advancement of
Rural Post Office for a New India),
its `1,400 crore IT modernisation
drive, was implemented to provide
better financial services, keeping
the changing trends of urbanisation
and technology in mind. One of the
primary aims of its IT efforts is to
improve financial inclusion of the
rural population.
The department has also launched
ATMs in post offices, called DOP
(Department of Post) ATMs, which
has a record of 11 lakh transactions,
till date. Summing up, the postal
schemes are suitable for all age
groups and economic backgrounds.
And as they come with a government
guarantee, they’re safe.
www.outlookmoney.com July 2018 Outlook Money
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