Definition: The Post Office Savings Account is the deposit scheme offered by the department of post on which fixed interest is paid. The individual investors deposit a good portion of their financial assets in a postal savings account in order to earn a fixed rate of interest on the investments.
The post office savings account is similar to a saving bank account ( a portion of financial assets deposited in the savings account in a bank). It has the following features:
- The annual rate of interest is 4% per annum on individual/joint accounts.
- The minimum deposit required to open the account is 20 for a non-cheque facility accounts. Subject to the withdrawal, a minimum balance of Rs. 50 is required to be maintained in the non-cheque facility accounts.
- The minimum deposit required to open a cheque facility account is 500 and subject to withdrawal a minimum balance of Rs. 500 must be maintained in such accounts.
- There is no limit on the maximum deposit in the post savings account.
- The interest earned on the account is tax exempted up to 10,000 in a financial year.
- The nomination facility is available at the time of the opening of the account or even after the opening of the account.
- One account can be opened in one post office either individually or jointly by two or three adults. Also, the account can be opened in the name of the minor and minor of age 10 or above can open and operate the account. Once the minor attains the age of 18 years is required to convert the account in his name.
- The deposits and withdrawals can be easily done through electronic mode in the Core Banking Solution (CBS) Post Offices.
- The account can be transferred from one post office to another, and also the inter-post office transactions can be done between the CBS post offices.
Note: The ATM/Debit card is issued to the savings account holder, provided a prescribed minimum balance is held in the account on the day of the issue of a card.