Post Office Savings Account: Everything You Need To Know
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The post office savings account is a deposit scheme provided by the post office throughout India. The account provides a fixed interest rate on the account balance. It is a beneficial scheme for individual investors who wish to earn a fixed rate of interest by investing a significant portion of their financial assets.Post office savings account is also a very helpful scheme for those residing in rural parts of India. Since the nationwide reach of the post offices is much greater as compared to banks, a large number of unprivileged people have been able to get access to savings accounts through post offices.
Eligibility for Post Office Savings Account
- An adult can open a post office savings account.
- The adult must be an Indian.
- In case a minor needs to open a post office savings account, he/she should be at least 10 years old.
- A guardian can also open an account on behalf of the minor.
- Two or three persons can open a joint post office savings account.
- A person who is not of sound mind can also open a post office savings account
Interest Rates On Post Office Savings Account
The central government decides the interest rates on the post office savings account. It is at 4% and it is calculated every month. According to the income tax regulations, if a post office savings account holder generates returns lower than Rs. 10,000 a year through interest, then it is tax-free.
Benefits of Post Office Savings Account
Opening a savings account through the post office is way easier than savings accounts in banks. Let us take a look at its benefits.
- A post office savings account requires a minimum balance of Rs. 20 to open the account.
- The cash can be withdrawn either partly or completely if need be.
- The risk exposure is very less to the account holders because they can avail an assured return on all the investments.
- The account can be transferred from one post office to another.
- Core banking post offices also provide the facility of ATM/Debit cards.
- An account can be opened in the name of minor who is below the age of 10 years. It will be managed and operated by the parent or guardian.
- An account holder can nominate a person to whom the funds will be provided in case of any demise to the account holder.
- Post office savings account does not have any maturity period. Hence, the account opening process is hassle-free and quick.
- An individual account can be converted into a joint account and vice-versa.
- People residing in a rural area can open a savings account with the post-office.
Steps To Open A Post Office Savings Account
- Get a form from the nearest post office or online. Separate forms are available for senior citizens.
- Fill-in the form and submit it along with the necessary KYC documents and photographs.
- Pay the amount that you wish to deposit, which should not be less than Rs. 20.
- In case you wish to open a post office savings account without a cheque book, then the minimum deposit amount required is Rs. 50.
- Separate forms are available for senior citizens.
- Once you pay the amount, your savings account will be generated.
Conclusion
The money deposited in a post office savings account can be withdrawn any time when the depositor needs it. Only thing is a minimum balance of Rs. 50 should be maintained in case of a generic account and Rs. 500 in case of cheque facility.
Also Read: Best Investment Plans In India
