A Post Office Savings Account is a government-run deposit scheme that is available at all Indian post offices. It pays you a fixed interest rate calculated by the Reserve Bank of India on your deposit. On both single and joint accounts, the fixed interest rate is currently 4%. Individuals who wish to gain guaranteed returns on their deposits with reduced risk should accept the Post Office Savings Scheme. Continue reading to learn more about this scheme and how to sign up for an account online.
Key benefits of post office savings account
- Accounts can be opened in the name of minors, and minors above the age of ten can open and manage the account accordingly.
- The facility of nomination is available both at the time of account opening and thereafter.
- Individually or jointly by two or three adults, the account can be opened and managed.
- One can deposit a minimum of Rs 500 with no upper limit in his or her post office savings account.
- If a Joint holder expires, the surviving holder becomes the primary holder; but, if the surviving holder already has a single account in his or her name, the Joint account will be closed.
- It is not possible to convert a single account to a joint account or vice versa. At the time of account opening, nomination is necessary. After reaching the majority, a minor should submit a new account opening form and KYC documents in his or her name to the relevant Post Office for transfer of the account on behalf of his or her name.
- The minimum withdrawal limit is capped at Rs 50. If the account balance does not exceed Rs. 500 until the end of the financial year, a fee of Rs. 100 will be withheld as Account Management Fee, and if the account balance falls to zero, the account will be terminated automatically.
- If the minimum deposit balance is less than Rs 500, no withdrawal is permitted.
- If no deposits or withdrawals are made in a savings account for three years in a row, the account is considered silent/dormant. Such accounts can be reopened by submitting an application to the relevant Post Office along with new KYC records and a passbook.
To open a savings account in the post office you need to meet the following eligibility criteria:
- A Post Office Savings Account can be opened by any Indian citizen over the age of ten.
- Guardians of minors can open a savings account on their behalf. Once minors reach the age of 18, they can request for the account to be transferred on behalf of their name.
- At any designated post office, an individual can only have one single or one joint account.
Post office savings account interest rate
The Reserve Bank of India determines the interest rates for Post Office Savings Accounts. Currently, post office savings accounts offer a 4% annual interest rate. Interest will be determined on a minimum balance between the 10th and the end of the month. If the balance dropped below Rs. 500 between the 10th and the last day of the month, no interest will be paid. At the end of each Financial Year, interest will be added to your account at the interest rate fixed by the Ministry of Finance. Interest will be paid up to the month in which the account is closed when the account is closed. Interest received on all Savings Bank Accounts up to Rs. 10,000 in a Financial Year is exempted from taxable income under section 80TTA of the Income Tax Act.
Steps to open a post office savings account online
- Visit the official website of India Post and head to the section 'Savings Account'
- Now click on 'Apply Now' and enter the required/mandated details
- Click on 'Submit' and verify all the entered details with your KYC documents.
- Now submit all the required KYC documents and upon verified by the post office you will receive a welcome kit which will contain cheque book, ATM Card, Aadhaar Seeding, ebanking/mobile banking credentials and so on.
Steps to open a post office savings account offline
To open a post office savings account at the branch, follow the below-listed steps:
- Download the post office savings account application form from the India post website and fill the form with all the required details.
- Submit the form, along with the necessary KYC documents and passport-size photographs, to the Post Office.
- Now pay the minimum deposit amount and your savings account will be opened in two business days after the above measures have been completed successfully.
Steps to open digital savings account with IPPB
To open a savings account at a post office, you must be at least 18 years old. To open a digital account, follow the steps below.
- Open the IPPB Mobile Banking app and select the 'Open Account' option.
- Enter your PAN and Aadhaar, now you will get an OTP on your registered mobile number.
- Enter the OTP in the required space in order to authenticate and enter the required details
- Once all the details have been filled out and submitted, the account will be opened successfully and accessible via the app.
- You must complete biometric authentication within one year of account opening, which is the account's validity span, after which it will be transferred to a regular savings account respectively.
India Post has declared that the withdrawal cap at Post Office GDS (Gramin Dak Seva) Branches will be increased in order to give comfort to rural Post Office Savings Account holders. The individual withdrawal threshold will now be Rs 20,000 instead of Rs 5,000. The change is believed to assist Post Office Savings Schemes to catch up to competing banks in terms of deposit demand in the near future.