With the growing economy and an increase in expenditure, people are now more than keen to open a savings account to safeguard some money for their future. While there are ample numbers of banks in the country offering good rates of interest, and many other offers for a savings account, banks are not readily available to people in the villages or small cities. Because of the lack of availability of banks in such places, people are often hesitant to give their money to foreign bodies even if it is safe.
Thus, the Government of India passed an act in 1873, known as the Government Saving Bank Act, under which the Post Office Savings Bank of India scheme came into existence.
The policy is aimed at every individual in the country who wishes to save money, but is either unable to understand the complexities of a large or private bank or due to unawareness, they are hesitant.
WHAT IS A POST OFFICE SAVINGS ACCOUNT?
The post office savings account is a deposit scheme provided by the post office of India throughout the country. The account provides a fixed interest rate on the account balance and benefits the individual investors who trust the post office with their financial assets. This is especially a useful scheme for those residing in rural India.
ELIGIBILITY FOR POST OFFICE SAVINGS ACCOUNT
In order to open an account in the post office, one must –
- Be at least 18 years of age
- In the case of a minor, they have to be at least 10 years of age
- Be an Indian
Two or three people can also collectively open a joint post office savings account.
A person who is not of a safe mind can also open an account if they have a guardian undertaking the responsibility for the same.
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INTEREST RATE ON POST OFFICE SAVINGS ACCOUNT
The interest rate is 4% and is calculated every month. According to Income Tax regulations, if a post office savings account generates less than Rs. 10,000 a year after interest then it is tax-free.
HOW TO OPEN A POST OFFICE SAVINGS ACCOUNT?
Here is a step-by-step guide on opening a post office savings account.
- Visit your nearest post office for in personal assessment or download the application form from India post’s official website
- Fill out the form with the details required
- Submit the required documents –
- Identity Proof (Aadhar card, PAN card)
- Address proof
- 2 passport size photos
Upon submission of the aforementioned documents, one can easily open their post office savings account.
DEPOSITING AND MINIMUM BALANCE
An initial deposit of 500 has to be submitted along with the documents. Post that there are no limits on depositing.
A minimum balance of 500 has to be maintained even after withdrawal. One can’t submit any less than 20 rupees.
BENEFITS OF A POST OFFICE SAVINGS ACCOUNT
Besides being a government-provided service, there are several other benefits of a post office savings account, such as:
- There is no lock in period or maturity date. Thus, money can be accessed whenever you need it
- Post offices are widely present throughout the country, even in the most rural areas one can easily find a post office.
- The deposited money will be safe as India Post is a government provided service.
- Accounts can be transferred from one post office to another.
- An account holder can also nominate a person to whom the funds will go to incase of one’s death.
- An individual account can be converted into a joint account and vice versa at any point.
A savings account is very crucial as it helps one safeguard their future against emergencies. Opening a savings account in the post office assures government security and a good rate of interest and provides the person with several other benefits.
