There were days when we would think of the Post Office as a means of mailing letters and documents to different places. With time, post office services have taken a tremendous makeover. Though they still handle mailing letters and documents, they now also offer various services, including saving schemes, insurance, banking, business and ecommerce, and retail services, to name only a few. In this article we will discuss how to open a post office savings account.
Post Office Savings Account
Generally, when we think of a savings account, we only think about banks. Well, times have changed and now post offices also offer the option to open post office savings account with attractive interest rates and benefits. It is, therefore, a good option to invest and receive a fixed interest rate on the amount invested. Besides, it is a great relief for villagers who cannot afford to visit banks located far from their villages. On the other hand, post offices are everywhere and within reach of rural areas.
One of the most important aspects of opening a post office savings account is that to avail any post office savings scheme, we need post office savings account. It is therefore, imperative to have a post office savings account.
Eligibility Criteria
The eligibility criteria for opening a post office savings account is simple. Let’s find out who can open a post office savings account:
- An Indian citizen only
- An adult (18 years and above)
- Joint account with two adults only
- A guardian on behalf of minor
- A guardian on behalf of individuals with mental disorder
- A minor who is above 10 years old can have a savings account on his / her own name
Deposit and Withdrawal Criteria in Post Office Savings Account
As compared to banks, post offices offer a minimum deposit amount of only 500 rupees, which needs to be maintained as a minimum balance. This minimal amount is easy to maintain in the savings account. If the minimum balance is not maintained at the end of the year, then 50 rupees will be deducted as account maintenance fee. On the other hand, the minimum withdrawal amount is 50 rupees, and there is no maximum limit of withdrawals, provided the account holder has that much amount in his or her account.
Interest Rates on Post Office Savings Account
Not only banks, but post offices are also offering attractive interest rates on savings accounts. Currently, the interest rate on a post office savings account is 4% per annum. According to the Income Tax Act, if an account holder earns interests on their invested amount, which is less than rupees 10k, there will be no tax on that amount.
Benefits of Opening Post Office Savings Account
There are a number of benefits associated with post office saving account. Some of the benefits are mentioned below:
- The savings account opening procedure is simple and hassle-free
- To open a savings account, only a minimum of 500 rupees is required
- In case of emergency, complete withdrawal is allowed, only 500 rupees balance needs to be maintained at the end of each financial year
- Account holder can transfer it from one post office to another branch, if needed
- ATM card is provided with a post office savings account
- Cheque book is provided
- E-banking and mobile banking facility available
- Nominee option is available
- With post office savings account, other savings schemes can be availed easily
Procedure to Open a Post Office Savings Account
Opening a post office savings account is easy and hassle-free if one follows the following steps:
- Reach out to the nearest post office and ask for saving account application form
- Fill out the application form correctly
- Attach documents such as Aadhaar card / PAN card for proof of identity; proof of address document: voter id / utility bill
- Attach two passport-size photographs
- Deposit 500 rupees
- After successful processing, the savings account is generated
FAQs (Frequently Asked Questions)
Q. What is post office savings account?
A. Post office savings account is a safe and beneficial method to save and grow money.
Q. How much one can deposit in the post office savings account?
A. The minimum deposit amount is 500 rupees, but there is no maximum deposit limit.
Q. Is post office savings safe?
A. Yes, the post office savings is safe and the investor money is protected.
Q. What is the cash withdrawal limit per day from the post office ATM?
A. Daily ATM cash withdrawal limit is 25,000 rupees
Q. Is there any charge if post office ATM is used at other bank ATMs?
A. For metro cities, 3 transactions are free per month. And, for non-metro cities, 5 transactions are allowed per month. Above the transactions limit would charge 20 rupees plus GST per transaction.