In India, the post office offers a deposit programme called the post office savings account. On the account balance, a set interest rate is offered. It is a useful programme for individual investors, who want to invest a sizable percentage of their financial resources in order to receive a fixed rate of interest. For those living in rural areas of India, post office savings accounts are also a highly beneficial programme. Since post offices have a far wider geographic reach than banks, many underprivileged individuals have been able to open savings accounts through post offices.
Post Office savings account: Features
- You have the option to close the account whenever you choose.
- Minors must be at least 10 years old to use their accounts.
- It is mandatory to make one deposit or withdrawal every three years to keep the account operational.
- Only cash can be used to open the account.
- There is a nomination function accessible both when opening the account and thereafter.
- Earned interest is exempt from tax up to Rs 10,000 per year.
- According to the guidelines of Section 80L of the Income Tax Act, income tax reduction is provided on the amount of interest.
- Single accounts can be converted to joint accounts.
- Accounts can be transferred from one post office to another.
- In CBS Post offices, deposits or withdrawals can be made using any electronic method.
- ATMs can be used for transactions.
Post Office savings account: Eligibility
- An adult can start a savings account at the post office.
- Indian adult status is required.
- A minor must be at least 10 years old in order to create a post office savings account.
- Additionally, a guardian may establish an account on the minor’s behalf.
- An account at the post office can be opened jointly by two or three people.
Post Office savings account: Documents required
- Application for Opening a Savings Account at the Post Office
- Form KYC
- National Population Register issues PAN Cards, Aadhaar Cards, Passports, Driver’s Licences, Voter’s Cards, MNREGA Job Cards, and letters.
How to start a savings account at the post office?
- Find a form online or at the nearby post office.
- Fill out the form and send it in with the required KYC paperwork and photos.
- Pay the desired deposit amount, which must be less than Rs. 20.
- The minimum deposit amount needed to start a post office savings account without a chequebook is Rs. 50.
- Senior folks have access to several forms.
- Your savings account will be created once you pay the sum.
Post office savings account: Interest rates
The interest rates on post office savings accounts are set by the central government. It is computed each month at a rate of 4%. The income tax laws provide that any interest income that a holder of a post office savings account receives that is less than Rs. 10,000 per year is tax-free.
Post Office savings account: Benefits
- A balance of at least Rs 20 is needed to create a post office savings account.
- If necessary, the money may be removed partially or entirely.
- The account holders’ risk exposure is very low because they may get an assured return on all of their investments.
- The feature to move the account from one post office to another.
- Post offices that offer core banking services also offer an ATM/debit card service.
- A minor who is younger than 10 years old may establish an account in their name. Parents or guardians will be in charge of running it.
- In the event of their passing, account holders have the option of designating a beneficiary to receive their funds.
- The savings account offered by the post office has no maturity date. As a result, creating an account is simple and quick.
- A joint account can be created from a single account, and vice versa.
- Rural residents have the option of opening a savings account at the post office.
Post Office Savings Accounts: Withdrawals
The money in a Post Office savings account may be withdrawn whenever the depositor deems it necessary. But, a minimum balance of Rs 50 in a basic account and Rs 500 in accounts with cheque-writing capabilities must be maintained.
New service fees for savings at Post Office
- Duplicate cheque book: Rs 50
- Deposit receipt issuance: Rs 20 per receipt
- Account statement issuance: Rs 20 per statement
- In the case of a lost or damaged certificate, a passbook will be issued for Rs 10 per registration.
- Creating a chequebook for a savings account: Up to 10 leaves in a financial year are exempt from fees. (Thereafter, Rs 2 per check leaf)
- Regarding account transfers and account pledges: Rs 100
- Fee for returned checks: Rs 100.
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