What is Post Office Savings Account?
Post Office Savings Account is a deposit scheme under the Government of India, operational at post offices throughout the country. It yields returns on your investment at a fixed interest rate which is decided by the Reserve Bank of India. Currently the fixed interest rate is at 4%
Postal Services in India have the maximum reach in terms of population. Their substantial presence in even the remotest of rural areas helps in financial inclusion of every family through their savings scheme.
Post Office Savings Scheme is beneficial for individuals who want to earn fixed returns on their investment with minimum risk.
Salient Features of Post Office Saving Account
- Account can be opened with cash only.
- The account can be opened in the name of a minor and minors above the age of 10 years can open and operate the account.
- Nomination facility can be availed at the time of and after opening the account.
- The account can either be opened individually or jointly by 2 or 3 adults.
- Minimum balance in an account without the cheque facility is ₹50. For accounts with cheque facility, this amount is ₹500.
- A minimum of one transaction in 3 financial years is required to keep the account active.
Post Office Savings Account Interest Rates
Interest rates for Post Office Savings Accounts are decided by the Reserve Bank of India. Over the years, it has hovered around 3-4%.
Currently, an individual earns interest at the rate of 4% on their account balance. The interest is calculated monthly and credited annually into the account.
How to open a Post Office Savings Account Online or Offline?
The process of opening a Post Office Savings Account is quite simple. Follow these simple steps to open a Post Office Savings Account:
- Visit your nearest post office branch to get the application form or download it from the website of India Post.
Download the post office savings account form: Click here
- Fill your basic details in the form.
- Submit the form at the Post Office along with necessary KYC documents and passport size photographs.
- Pay the minimum deposit amount of ₹20 for account without the cheque facility or a deposit amount of ₹500 for account with a cheque facility.
- After successful completion of the above steps, the savings account will be opened in 2 business days.
Eligibility Criteria for opening Post Office Savings Account
- Any indian resident above the age of 10 years can open a Post Office Savings Account.
- In case of minors, guardians can open the savings account on their behalf. When the minors attain the age of 18 years, they have to get the account transferred to their name.
- An individual can only hold one single and one joint account at a particular post office.
Withdrawals from Post Office Savings Account
Just like a Savings Account in any Scheduled Bank, depositors can withdraw money from Post Office Savings Account as per their wishes and needs. There is no lock-in or maturity period.
However, a depositor has to make sure that a minimum balance of ₹50 is maintained in an account without the cheque facility, and a balance of ₹500 for an account with a cheque facility.
Benefits of Post Office Savings Account
- Individuals can also avail tax benefit on interest earned through Post Office Savings Account. Interest earned upto ₹10,000 is exempted from tax in a given financial year.
- There is no lock-in or maturity period unlike Fixed Deposit Schemes. It works like any other savings account in a scheduled bank.
- A single account can be converted into a joint account and vice versa.
- One can also get a debit card or ATM card for this account. Transactions from this account at branches with core banking facility.
- Because of the vast presence of Post Offices across India, adults from rural areas can also avail the benefits of banking services through this scheme.
- Account at one post office can be transferred to another branch as well.