Page 94 - DMGT515_PERSONAL_FINANCIAL_PLANNING

Unit 5: Investment Vehicles

(iii) Commuted value of pension. Notes
(iv) Cash equivalent of leave,
(v) Savings element of Government insurance scheme payable to the employee on
retirement, and
(vi) Arrears of retirement benefits, as defined in (i) to (v) above on implementation of
Fifth Pay Commission’s recommendations.

Withdrawals
Whole or a part of the deposits can be withdrawn at any time after expiry of the normal
maturity period of 3 years.

Premature Withdrawal
(i) Not permissible before completion of one year.
(ii) Permissible after completion of one year and before completion of three years on
reduced interest rate.
Interest
(i) Interest at the rate, notified by the Central Government from time to time, is credited
and payable on half yearly basis at any time after 30th June and 31st December every
year.
(ii) Present rate of interest is Seven per cent/per annum since: 1st March, 2003.

Transferability
Account can be transferred from one public sector bank to another public sector bank
operating the scheme due to change of residence.

Pass Book
Depositor is provided with a pass book with entries of the deposited amount, interest etc.
and other particulars by the bank.

Income Tax Relief
(i) Interest accrued/credited/paid is fully tax-free.
(ii) Amount deposited under the scheme is free from wealth tax.
Banks Authorised to Accept Deposits

Selected branches of the following banks are authorized to accept deposits under the
scheme.
8. Deposit Scheme for Retiring Employees of Public Sector Companies
Who can open an account?

Retired/retiring employees of Public Sector Undertakings, Institutions, Corporations,
viz:

(i) Public Sector Banks,
(ii) Life Insurance Corporation of India,
(iii) General Insurance Corporation,
(iv) Public Sector Companies, etc.

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