What is a Post Office Savings Account?
A Post Office Savings Account is quite similar to a regular savings bank account. The Post Office Savings Account is a deposit scheme backed by the Government of India which is available in the branches of the post office across the country. It provides returns on the deposits made by individuals at a fixed interest rate set up by the Finance Ministry of the Indian Government. The interest rate currently offered on the PO Savings account is 4% p.a which is compounded annually.
Eligibility Criteria- Who can make deposits?
Eligibility criteria set for Post Office Savings Account is as follows:
- A Post Office Savings Account may be opened by any Indian resident adult.
- A joint account with a maximum of 2 adults can be opened. Conversion of joint to a single account is not allowed & vice versa.
- Guardians can open an account on behalf of a minor or a person of unsound mind. In the case of minors, when they attain the age of 18 years, the account needs to be converted in their name by submitting the fresh account opening form.
- A minor above the age of 10 years is also eligible to open an account in his/her name.
- An individual is allowed to open only one single account & a joint account in a post office branch.
How to open a Post Office Savings Account?
- The Post Office Savings account application form is available in all the branches of the post office as well as on the official website of India Post. You can get the application form from your nearest post office.
- This application form needs to be duly filled & submitted along with the required self-attested documents. Upon successful activation, the individual will be able to access the PO savings account and other banking facilities.
- The minimum deposit as required would need to be paid while submitting the application form & documents.
Features & Benefits of Post Office Savings Account
The minimum deposit to be made while opening the account is Rs.500.
The minimum amount required to make deposits into the Post Office Savings Account is Rs.500. And there is no upper limit for deposits into the account.
2. Minimum Account Balance
The minimum account balance to be maintained at the end of a financial year is Rs.500. If the balance falls below Rs.500 at the end of the financial year, account maintenance fees of Rs.100 will be deducted from the account.
And if the balance becomes zero, the account will be automatically closed.
The minimum withdrawal amount has been set at Rs.50. Withdrawals will not be allowed if they will reduce the account balance below the minimum balance requirement of Rs.500.
4. Nomination Facility
Nomination facility is available in the post office savings account. Also, it is mandatory to add nominees for depositors while opening the account. The nominees are entitled to receive benefits & corpus in account upon the unfortunate death of the depositor.
5. Interest Rate
Post Office Savings Account offers a fixed interest rate of 4.0% p.a. which is compounded annually. The interest rates are subject to quarterly revisions by the Government of India.
Accounts can be transferred from one post office branch to another across the country.
7. Tax Benefits
Interest earned by individuals from savings accounts (including all accounts in banks, post offices) are eligible for claiming tax exemptions of up to Rs.10,000 in a financial year under Section 80TTA of Income Tax Act,1961.
8. Silent Account
In case no transactions i.e deposits/withdrawals are made continuously for 3 financial years, the account will be treated as a silent or dormant account.
One can revive that silent account by submitting an application along with the required KYC documents & passbook at the branch.
9. E-banking/ Mobile banking
E-banking or Mobile banking facility can also be availed in the post office savings account by submitting the duly filled application form at the branch. These facilities allow you to have online access into various facilities such as the opening of time deposit/recurring deposit, taking loans against RD or PPF withdrawals, repayment of loans, deposits into various schemes, accessing transaction history & many more.
10. Additional Facilities
Following facilities can also be availed on the post office savings account:
- Cheque book
- ATM Card
- Banking - Internet & Mobile
- Atal Pension Yojana
- Aadhaar Seeding
- Pradhan Mantri Suraksha Bima Yojana
- Pradhan Mantri Jeevan Jyoti Bima Yojana
Frequently Asked Questions (FAQs)
1. How many accounts can be opened in one post office?
Only one account can be opened in a single branch of the post office.
2. What is the lock-in period for the Post Office Savings Account?
There is no lock-in period for the Post Office Savings Account.
3. Is a nomination facility available for the post office savings account?
Yes, a nomination facility is available.
4. Is a transfer facility available for the account?
Yes, one can transfer his account from one branch of the post office to another.
5. What is the interest rate currently offered on the PO savings account?
The interest rate currently offered is 4% p.a.
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