Post Office Savings Account
A Post Office Savings Account is similar in many ways to a regular savings account. It is considered 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
Post Office savings accounts are also best suited for those individuals living in rural and semi-rural areas, which have limited exposure to banking. Due to the large network of post offices in India, the government introduced the concept of opening savings accounts through post offices, especially since the country-wide reach of post offices is far greater than banks.
How to Open a Post Office Savings Account
A Post Office savings account can be opened at any post office with a minimum balance of Rs 20. 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 .
Who is eligible to open a Post Office Savings Account
The following individuals are eligible to open a 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
However, Group Accounts, Institutional Accounts and other accounts like Security Deposit Accounts & Official Capacity Accounts are not permissible.
Withdrawal of Money from a Post Office Savings Account
In a Post Office savings account the amount deposited can be withdrawn at anytime as per the depositor’s needs. The withdrawal is, however, subject to the maintenance of a minimum balance of Rs. 50 in a simple account and Rs. 500 for cheque facility accounts.
Post Office Savings Account Interest Rates
The rate of interest offered by a Post Office savings account is decided by the Central Government from time to time and is generally between 3% to 4%. Interest is calculated on monthly balances and credited annually.
Features of a Post Office Savings Account
The main features of a Post Office savings account are:
- The depositor can choose to close the account at any time of his or her choosing
- The account can be opened by cash only
- Nomination facility is available at the time of opening the account as well as after opening the account
- Interest earned is tax free up to Rs 10,000 per year from financial year 2012 - 13
- 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.
Post Office Savings Account FAQs
Q. What happens to the amount in the event of the death of the depositor?
A. If the depositor dies the amount shall go to the nominee. In case the account is without a nomination at the time of the depositor’s death and the amount due is not exceeding Rs 60,000, the Department of Post Office may pay the same to a person appearing before him, who is entitled to receive it or to administer the estate of the deceased.
Q. How many accounts can be opened at one post office?
A. Only one single account and one joint account can be opened at one post office
Q. How can a person avail of the cheque system facility for a post office savings account?
A. Application for availing the facility of Cheque System be submitted on Form SB/CQE-4 and requisition for fresh Cheque Book for Savings Account on Form SB/CQE-4A.
- Pradhan Mantri Adarsh Gram Yojana
- Rashtriya Krishi Vikas Yojana
- Rashtriya Sam Vikas Yojana
- Sampoorna Gramin Rojgar Yojana
- Shyama Prasad Mukherji Urban Mission
- Sovereign Gold Bond Scheme from Kotak Mahindra Bank
- Swarnajayanti Gram Swarozgar Yojana
- Valmiki Ambedkar Awaas Yojana
- Vikas Yojana Skill India Program
- 4 Essential-documents About Death Claims
- 7 Ways to Check PF Account Balance
- Banking Ombudsman
- Gold Saving Funds vs Gold ETF
- Gramin Bhandaran Yojana
- Gratuity Calculator and How to Calculate Gratuity
- Indira Gandhi Matritva Sahyog Yojana
- Pooled Finance Development Fund Scheme
- Salary Definitions for Calculation of Gratuity HRA
- Sugamya Bharat Abhiyan
- Losing Bank Locker Keys Here What You Need to Know