Post Office savings account: Know benefits, interest rates and eligibility | EXPLAINED

Post office savings accounts offer better interest rates than banks, with a minimum balance requirement of only Rs. 500. Facilities like cheque book, ATM card, and e-banking are also provided.

Post Office Savings Account

In today's era, everyone has a savings account. Whether you want to avail the benefits of any government scheme, make payments through UPI, or invest in FDs, it's not possible without a savings account. Generally, people open savings accounts in banks.

But if you open a savings account in the post office, you can get many benefits in that account. In this, you will get all the facilities like a bank savings account, and you will also get better interest. Learn about all the features of the post office savings account.

New account with Rs.500

Whether you open a savings account in a bank or a post office, it is very important to maintain a minimum balance in your account everywhere. Otherwise, you will have to pay a penalty. Usually, the minimum balance limit in a regular savings account in banks is at least 1000, but a post office savings account can be opened with a minimum of 500 rupees, which is its minimum balance limit.

Bank-like facilities

Just like a bank, you get many facilities in a post office savings account. When opening an account, you get facilities like cheque book, ATM card, e-banking/mobile banking, Aadhaar linking.

Apart from this, you can also avail government-run Atal Pension Yojana, Pradhan Mantri Suraksha Bima Yojana, and Pradhan Mantri Jeevan Jyoti Bima Yojana in this account. Under Section 80TTA of the Income Tax Act, interest earned up to Rs.10,000 in a financial year from all savings bank accounts is exempt from taxable income.

Better interest than banks

Banks give interest from time to time on the amount deposited in the savings account, but this interest is usually between 2.70% to 3.5%. But in a post office savings account, you will get much better interest than banks. Here are the interest details received on regular savings accounts of major banks and post offices-

Interest rate for Post Office Savings Account: 4.0%
SBI Savings Account Interest Rate: 2.70%
PNB Savings Account Interest Rate: 2.70%
BOI Savings Account Interest Rate: 2.90%
HDFC Savings Account Interest Rate: 3.00% to 3.50%

ICICI Savings Account Interest Rate: 3.00% to 3.50%

Who can open an account?

Any adult can open an account at a post office. Apart from this, two people can also jointly open their account. If an account is to be opened for a minor, his parents or legal guardian can open the account on his behalf. At the same time, a minor above 10 years of age can open an account in his name. After becoming an adult, the minor has to transfer the account to his name by submitting a new account opening form and KYC documents at the concerned post office.

Fees to be paid

If the amount in the post office savings account is less than Rs.500 and remains below this limit at the end of the financial year, a maintenance fee of Rs.50 will be deducted.
You have to pay Rs.50 to get a duplicate passbook.
Rs.20 has to be paid to get an account statement or deposit receipt.
Rs.100 is charged for account transfer and account pledge respectively.
Rs.50 is charged to change or cancel the nominee's name.
You can use 10 leaves of the cheque book in a year without any charge, after which a fee of Rs.2 is charged for each leaf.