Post Office Savings Bank is one of the most affordable and attractive banking services available in India. we all know that India post is the largest postal network in the world. India post has post offices all over india. so the banking services by the post office bank is available accross lenth and breadth of India. the main aim of the Post Office Savings Bank is to provide banking services to the rural area of India. In this post, we will discuss Post Office Savings Bank and its features.
Also read: India Post Mobile Banking App
Post Office Savings Bank
A Post Office Savings Account is one of the most popular and accessible savings accounts in India. Currently, the interest rate offering for this account is 4.00% p.a. It can also be open by a minor above the age of 10 in their own name. Only one account can be open as a single account by the individual. There is no limit on the maximum amount that can be deposit in a post office savings account. It is also eligible for tax exemption for the interest of up to Rs.10,000 earned in a financial year (for all savings accounts combined) under the Income Tax Act 80TTA.
Post Office Savings Account is similar in many ways to a regular savings account. It is considering to be a highly secure instrument to deposit funds into and offers the option of full or partial liquidation of funds at very short notice in case the need arises. These accounts generally offer a guaranteed return on investment and are ideal for senior citizens and people who are looking to earn a regular income without exposure to risk.
Also read: India Post Payments Bank Account
| Minimum initial deposit | ₹20 |
| Minimum balance for an account without checkbook | ₹50 |
| Minimum balance or initial deposit for an account with checkbook | ₹500 |
| Interest rate | 4% p.a. |
| Tax-Free Interest | Up to ₹10,000 p.a. |
Features of Post Office Savings Account
- You can choose to close the account at any time of his or her choosing
- Minors above the age of 10 years can operate their accounts
- To keep the account active at least one deposit or withdrawal must be done once in 3 years
- The account can be opened only using cash
- Nomination facility is available at the time of opening the account and after opening the account
- Interest earned is tax free up to Rs 10,000 per year
- Income tax relief is available on the amount of interest under the provisions of section 80L of the Income Tax Act.
- The account can be transferred from one post office to another
- Single accounts can be converted to joint accounts and vice versa
- Deposits and withdrawals can be done through any electronic mode in CBS Post offices.
- Transactions can be done via ATMs
Post Office Savings Account Benefits
- Cheque facility: Cheque facility is available and can be request for existing accounts as well.
- ATM/Debit card: For those account holders who have maintained the prescribed minimum balance on the day of issuance of the debit card, CBS Post Offices can grant ATM/Debit cards.
- Minor Accounts: Post Office Savings Account is available to minors. For minors below the age of 10, an account can be opened in their name, but the parent or guardian will be given rights to operate the account on their behalf. Minors of 10 years and above can operate the account on their own.
- Portability: If you shift your residence or are not happy with the services of the post office branch or for any other reason, you can shift your Post Office Savings Account to a branch of your choice. Only one account can be opened in one post office.
- Nomination: The facility to nominate someone is made available under these accounts at the time of opening the account. The account holder can also choose to nominate a person to receive the proceeds of this account after their demise at any time.
- Joint Holdings: Two or three adults are allowed to hold an account together under the joint account facility. A single account can be converted to a joint account and vice versa.
- Tax Exemptions: Two or three adults are allowed to hold an account together under the joint account facility. A single account can be converted to a joint account and vice versa.
- Electronic Facilities: Customers can make withdrawals and deposits through any electronic mode in CBS Post offices.
- Long period for Inactivity: The account will not be deemed inactive unless there are no transactions for 3 financial years.
Eligibility to Open Post Office Savings Account
- Minors with a minimum age of ten years
- A guardian on behalf of a minor
- A person of unsound mind
- Two or three adults can open a joint account
- Group Accounts, Institutional Accounts and other accounts like Security Deposit Accounts & Official Capacity Accounts are not permissible.
Post Office Savings Accounts Interest Rate
Post Office savings account interest rate is deciding by the Central Government from time to time and is generally between 3% to 4%. Interest is calculated on monthly balances and credited annually.
Post Office Savings Accounts earn a fixed rate of interest through the year, subject to change from time to time, as declared. Currently, the interest rate is as given below:
| Details | Percentage (p.a.) |
|---|---|
| Rate of Interest | 4% |
How to Open Post Office Savings Account
follow these simple steps to open a post office savings account.
- Visit your nearest post office or the official website of India Post and get the application form.
- Fill the form with appropriate information
- Furnish the relevant documents, and a passport size photograph.
- Pay a deposit amount, which cannot be lower than Rs.20.
- If you want to get a post office savings account without a chequebook, you will need to pay a deposit amount of at least Rs.50.
Single account holders can deposit a maximum of Rs one lakh while joint account holders can deposit a maximum of Rs two lakhs. One of the main features of a Post Office savings account is that there is no lock-in or maturity period. Opening an account of this kind is relatively hassle-free since one can walk into any post office, complete the formalities with the clerk, and open an account immediately.
Other Post Office Investment Options
| S.No | Investment Option | Rate of Interest (p.a.) |
|---|---|---|
| 1 | Public Provident Fund (PPF) | 7.1% compounded annually |
| 2 | Senior Citizen Savings Scheme (SCSS) | 7.4% |
| 3 | Kisan Vikas Patra (KVP) | 6.9 % compounded annually |
| 4 | Sukanya Samriddhi Yojana (SSY) | 7.6% |
| 5 | Post Office Monthly Income Scheme (MIS) | 7.3 % payable monthly |
| 6 | National Savings Certificate (NSC) | 6.8 % compounded annually |
New Service Charges on Post Office Savings
If you want to open a post office savings scheme, keep in mind that a few service charges are applicable as well:
- Issuing duplicate cheque book: Rs.50
- Rs.20 per receipt Issuing deposit receipt:
- Issuing account statement: Rs.20 per statement
- Cancellation or change of nomination: Rs.50
- Passbook issuance in lieu of missing or mutilated certificate: Rs.10 per registration
- Issuing a cheque book in Savings bank account: No fee will be charged up to 10 leaves in a financial year. (Rs.2 per cheque leaf thereafter)
- For transferring an account, and pledging of an account: Rs.100
- Cheque dishonor fee: Rs.100
Final thoughts
Post Office Savings Bank is the bank operated by the government of India under India post. the main aim of the Post Office Savings Bank is to provide banking services to the rural area of India. in this post, we discussed the features and advantages of Post Office Savings Bank. i hope this post will give you a good idea about Post Office Savings Bank.
Happy banking