- Instant money transfer
- 24x7 ATM withdrawals
- Attractive rate of interest
With untiringly changing financial market scenario and increasing number of banks, financial institutions, and online resources that give ample opportunities for savings, many people in India are unable to decide the right place to save their surpluses to meet future financial obligations. Hence, people are seeking advice on the most suitable and workable saving methods from the numerous schemes made available by the banks, so as to manage their personal finances in a better way. This article is an attempt to throw some light on one of the oldest but most trusted means to save your hard-earned money.
These ways offer surefire revenues, improved interest rates, financial security, ways to save on tax as per the several sections of Indian Income Tax Act and other lucrative perks. Let us now discuss on these aspects of post office savings accounts. The post office savings scheme is offered by the Department of Posts in India, backed by RBI and Central government. It is the oldest banking service institution in our country and to date the most used and favored. It functions in support of Ministry of finance. At present, there are over 200 million post office savings accounts and these are being functioned in more than 1 lakh post offices nationwide.
Types of Savings Accounts that Can be Started with Post Office:
The Indian postal sector has numerous post office savings policies. The savings schemes include the following among others:
- Saving Account Schemes (SAS)
- Recurring Deposit Schemes (RDS)
- Fixed Deposit Schemes (FDS)
- Public Provident Fund Schemes (PPF)
- National Savings Certificate (NSC)
- Monthly Income Schemes (MIS)
Features & Benefits of Post Office Saving Account
- With Reserve Bank of India decontrolling interest rates on savings deposits, the Government of India also escalated the same on post office savings scheme to 4 percent from 3.5 percent.
- At present post office savings account offers 4 percent rate annually.
- You must put in at least INR 20 to open an account.
- You can open an account by cash payment only.
- You need to keep in a minimum balance of at least INR 50 in a non cheque facility account.
- You can avail cheque facility as well if your account has a starting deposit of at least INR 500. It goes without saying that this balance has to be maintained every month.
- You can also request a Cheque facility with a prevailing account.
- The interest you make from your post office savings is not taxed up to INR 10,000 yearly as of now.
- It also comes with a nomination feature. You can fill in the details of the nominee(s) at time or after starting your account.
- Though your account can be transformed from one post office to another, you are allowed to have only one account in your name in one post office.
- Account can be opened in the name of minor and a minor of 10 years and above age can open and operate the account.
- You may even start a joint account with another adult or two.
- To keep your account active, you need to do a minimum of one fund transfer (depositing or withdrawing) in three financial years.
- Your single savings account can be made into joint one any time you wish to and viz.
- If the account is opened for a minor, he/ she can apply to get it in their name after turning 18.
- Cash depositing and withdrawals can be performed through any electronic mode in Core Banking Solution (CBS) Post offices.
- Inter post office fund transfers can be done between CBS post offices
- ATM cum Debit Cards can be distributed to Savings Account users (having agreed on a minimum balance on the day of card issuance) of CBS Post offices.
Interest earned in Post Office Savings Scheme – 4% per annum as of 10th July, 2019
The current interest rate offered on the Post Office Savings Account is 4% per annum. It is paid annually, unlike the Monthly Income Scheme where the interest is paid monthly. The first Rs. 10,000 of interest earned each year is tax free. Tax will be applicable on the remainder according to the prevailing income tax slab.
Documents Required to Open a Post Office Savings Account
You will need 1 to 2 passport size photographs. Apart from that, you will need to furnish ID proof and address proof. You can submit the following documents for these purposes:
ID Proof
- Electoral Photo Identity card
- Ration Card
- Passport
- Driving License
- Photo Identity Card from a recognised educational institute
- Letter issued by the Unique Identification Authority of India (UIDAI)
Address Proof
For address proof, the documents provided must have the current address mentioned on them.
- Bank or Post Office Passbook
- Passport
- Ration Card
- Utility bills such as electricity and telephone bills
- Salary Slip from a reputed Employer
- Certificate from any Public Authority
- Letter issued by the Unique Identification Authority of India (UIDAI)
Debit Card
Debit Card
