Post Office Savings Account & Schemes: Minimum Balance, Interest Rate and Other Details

Saving Account1959 views

Highlights

  • Post Office Savings Account Customers Will Now Enjoy Digital Banking Service
  • Savings Bank Accounts at Post Offices Will be Linked to IPPB Accounts

Table of Contents

Post Office Savings Account

India Post, apart from delivering the mails, is also best known for offering a wide range of financial and retail services under the Department of Posts (DoP). Yes, these include Small Savings Schemes such as Public Provident Fund (PPF) and National Savings Scheme Certificate (NSC) to name a few. Moreover, India Post under plenty of savings schemes also offer Post Office Savings Account-with or without cheque book facility.

If we look at the figures, currently 37 crore of the pollution is having the savings bank account in the post office, which means savings accounts are among the most popular of its products. Post Office Savings Account can easily be opened by cash only. But what is the Interest Rate offered? What is the minimum balance to be maintained in the account? What are the other services and salient features offered by this type of savings account? Curious to know the answers of all the questions above? All you need to do is just read the blog post below.

Post Office Savings Account Interest Rate

India Post currently offers an interest rate of 4% per annum on an individual account or joint accounts, held in the post office savings account. Not only this, the interest earned is tax-free up to ₹10,000 in a financial year.

Post Office Savings Account Minimum Balance

The minimum balance required in a non-cheque facility account is ₹50. Whereas, for savings accounts with a cheque-book facility, the minimum balance to be maintained is ₹500.

Post Office Savings Account Minimum Opening Balance

The minimum amount required to open a post office savings account is ₹20. The account can be opened by cash only.

How to Open the Post Office Savings Account?

Opening a post office savings account is really simple.

  • Visit your nearest or preferred post office. A savings account can be opened in any post office.(you can later transfer the account from one post office to another if required)
  • Ask for savings account opening form or you can download the same online.
  • Submit the duly filled and signed application form along with the required KYC documents and 2 recent photographs
  • Pay the minimum account amount of ₹20 to open your account. The maximum amount of initial deposit is ₹1,00,000(single account) and ₹2,00,000 (joint account)
  • That’s All! Your account will be opened

Note:

  • You can later make deposits and withdrawals in cash, or through any electronic mode in CBS Post offices.
  • At least one transaction in three years is required to keep the account active
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Can Post Office Saving Account be Opened Online?

A post office savings account cannot be opened online as of now. You can only download the account opening form online

Who Can Open a Post Office Savings Account?

  • The person should be an adult
  • An individual with an Indian Nationality
  • Minors with a minimum age of 10
  • A Guardian on Behalf of a Minor
  • 2 or 3 Individuals (Joint Account)
  • A person of unsound mind

Note:

  • You can either open a single account, or two or three adults can open a joint account.
  • You can only open one single account and one joint account at one post office.

Documents Required to Open Post Office Savings Account

Post Office Savings Account opening documents required are as follows:

ID Proof
Any of the following – Election Card, Ration Card, Passport, Driving License, Aadhaar Card or letter issued by Unique Identification Authority of India (UIDAI), photo ID card issued by recognized University/Education Board/College/School/Central or State Government/PSU
Address Proof
Any of the following – Electricity Bill, Telephone Bill (not more than three months old), Passport, Ration Card, Aadhaar Card or letter issued by UIDAI,  Bank or Post Office Passbook/Statement
Two recent passport size photographs. In case of a joint account, you need to give proofs and photos of all the account holders.

Salient Features of Post Office Savings Account

  • The account can be opened by cash only
  • Minimum balance to be maintained in a non-Cheque facility account is ₹50
  • Cheque facility available if an account is opened with ₹500 and for this purpose minimum balance of ₹500 in an account is to be maintained
  • Cheque facility can be taken in an existing account also
  • Interest earned is Tax-Free up to ₹10,000 per year from the financial year 2012-13
  • Nomination facility is available at the time of opening and also after the opening of an account
  • The account can be transferred from one post office to another
  • One account can be opened in one post office
  • An account can be opened in the name of the minor and a minor of 10 years and above age can open and operate the account
  • A joint account can be opened by two or three adults
  • At least one transaction of deposit or withdrawal in three financial years is necessary to keep the account active
  • A single account can be converted into Joint and Vice Versa
  • Minor after attaining majority has to apply for conversion of the account in his name
  • Deposits and withdrawals can be done through any electronic mode in CBS Post offices
  • ATM facility is available

Post Office Savings Account Holders Will Now Enjoy Full Digital Banking Service

Here comes the good news for all the 34 crore Post Office Savings Account Holders as very soon they can avail the full-fledged digital banking service. Yes, the Government has decided to link the post office savings account with India Post Payments Bank (IPPB), which will be operational in May, 2018. An official source said ‘’The Finance Ministry has approved linking of savings bank accounts at post offices with IPPB accounts. This will enable post office account holders to transfer money from their accounts to any bank accounts”.

If we talk more about the savings accounts in the post office, out of the 34 crore accounts, 17 crore are listed as savings accounts and the rest fall under monthly income schemes, recurring deposits, etc. Well, if experts are to be believed, this initiative of India Post will establish country’s largest banking network by linking all its 1.55 lakh branches with IPPB. Moreover, the India Post has started its core banking service but currently, it only offers the fund transfer service within the post office savings bank accounts. But now, with this move, the account holders can instantly transfer funds to any bank accounts without any hassle. However, this digital banking service is optional for the post office savings account holders, which means if the account holders choose this service, only their accounts will be linked to the IPPB account.

According to an official statement issued earlier, India Post willing to start the operations of its 650 IPPB branches from this month onwards and the same will be linked to the smaller post offices in the districts. Not only this, the Government is also working on the second phase of planning, which will be operational in the month of September this year. Under the second phase of planning, the post office account holders will have an option to pay for the post office products such as depositing money for Sukanya Samridhi Yojana, Recurring Deposits, Speed Post and many more from their IPPB accounts. The India Post Payment Bank is governed by the Reserve Bank of India and the banking service of post offices come under the Finance Ministry.

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Just like any other banking customer, the IPPB customers can also enjoy plenty of benefits by using NEFT, RTGS and other fund transfer services. Not only this, IPPB is also going to launch its app and will start registering various merchants such as grocery stores, tickets etc who will accept from the customers. So, which means, soon after the linking of post office savings accounts with India post payments bank, the customers cannot only do the third party transactions but can also make payments to various merchants with the help of using an app of IPPB.

Post Office Sukanya Samriddhi Yojana

New parents of girl child now get the a chance to save huge corpus. Post Office has launched Post Office Sukanya Samriddhi Yojana where a parent can save money for her girl child. The interest rate offered on the scheme is higher as compared to other investment options in India. The account will be discontinued if no deposit is done in a financial year. However, it can be revived by paying a penalty of ₹50 per year with minimum amount required for deposit for that year.

Who can open Sukanya Samriddhi Account?

A legal guardian or a girl child can open only one account in the name of one girl child and maximum of two accounts in the name of two different girl children. The Post Office Sukanya Samriddhi Yojana account can be opened in the name of a girl child who is below the age of 10 years.

What is the minimum and maximum amount for Sukanya Samriddhi Account Deposit?

A parent can start by investing a minimum of ₹1000 a maximum of ₹1,50,000 in a financial year in Sukanya Samriddhi Yojana account. Subsequent deposit in the account can be made in multiples of ₹100. As an account hodler, you can also deposit in lump-sum or monthly in a financial year as there is no limitation for the same.

What is the interest rate offered by Post Office?

The interest rate offered by Post Office on Sukanya Samriddi Yojana is higher than most of the other investment options. Post Office is offering 8.10% per annum interest rate (with effect from 1-01 -2018 ), calculated on yearly basis, yearly compounded.

What is the maximum lock-in period?

A depositor can make deposits in the Sukanya Samriddhi account needs to be made only for 14 years. A yearly investment of just ₹50,000 for 14 years would turn into ₹23 lakh after maturity. This amount is safe and secure with the government owned Post office.

When is the withdrawal allowed?

Only when the girl child is 18 years old or gets married can the money be withdrawn. However, partial payment of maximum up to 50% of the balance standing at the end of the preceding financial year, is allowed after the account holder becomes 18 years old.

 

​15 Year Public Provident Fund Account (PPF)

Talking about 15-Year Public Provident Fund, it is one of the most popular savings schemes offered by the Post Office.  This savings scheme not only helps you grow your savings but also allows you to save income tax. An individual can open the account with Rs.100 but has to deposit minimum Rs.500 in a financial year. This account cannot be opened jointly and it comes with a maturity period of 15 years. Under this savings scheme,nomination facility is available at the time of opening and also after opening the account. Not only this, the account can be transferred from one post office to another. Under this scheme, loan facility is available from 3rd financial year.

What is the interest rate for 15 Year Public Provident Fund Account?

Under this scheme, Post Office is offering an interest rate of 7.6% per annum to the individuals. The rates are compounded yearly and are applicable from (1.01.2018.)

What is the Minimum & Maximum Balance for 15 Year Public Provident Fund Account?

An individual can open the account with Rs. 100 but has to deposit minimum of Rs. 500 and maximum of Rs.1,50,000 in a financial year.

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Who can open 15 Year Public Provident Fund Account?

Any individual can open the account in the post office. The joint account cannot be opened. The account can be opened by cash / Cheque and In case of Cheque, the date of realization of Cheque in Govt. account shall be date of opening of account.

What is the maximum lock-in period?

Maturity period is 15 years but the same can be extended within one year of maturity for further 5 years and so on. Premature closure is not allowed before 15 years. Maturity value can be retained without extension and without further deposits also. Withdrawal is permissible every year from 7th financial year from the year of opening account

What are the income tax benefits under 15-Year PPF Account?

PPF deposits qualify for deduction from income under Section 80C of the Income Tax Act. Interest income earned on PPF accounts is completely tax-free.

National Savings Certificate(NSC)

Post Office National Savings Certificate is one of the most popular small savings schemes among Indians which comes with tax rebate. It is a fixed income investment scheme that can be opened in any post office. This savings scheme mainly encourages small to mid income investors to invest while savings on income tax. It comes with a lock-in period of 5 years. Under this scheme, the nomination facility is available and you can keep NSC certificate as collateral/ security to get the loan.

 

What is the  Interest Rate offered by National Savings Certificate?

From 1.01.2018, the interest rate offered by post office under this scheme is 7.6%, which is compounded annually but payable at maturity.

What is the Minimum & Maximum Balance for National Savings Certificate?

The minimum amount for opening the account is Rs.100. There is no maximum limit for maintaining the balance. Suppose, if you pay Rs.100 for 5 years, it comes to Rs. 144.23​.

What is the maximum maturity period for National Savings Certificates Account?

It comes with a maturity of 5 years but under certain circumstances premature withdrawal oF NSC is also allowed. The permissible reasons for NSC Certificate premature withdrawal are:

  • On account of death of the NSC holder/s (in case of joint account)
  • When ordered by a court of law
  • On forfeiture by a pledgee being a Gazette Government Officer when the pledge is in the conformity with these rules

What are the income tax benefits for National savings certificates?

Deposits qualify for tax rebate under Sec. 80C of the Income Tax Act. The interest accruing annually but deemed to be reinvested under Section 80C of IT Act.

What are the different types of NSC certificates available?

Depending on who can open account- there are 3 types of accounts- singer holder, joint A type certificate and joint B type certificate.

Kisan Vikas Patra (KVP)

Kisan Vikas Patra is a small savings certificate scheme offered by the Post Office. The primary objective of this scheme is to encourage the long-term financial discipline in the people. This scheme comes with a tenure of 118 months (9 years & 10 months). Initially, this scheme was meant for farmers but now it is available for all. Under this scheme, nomination facility is available and it can be transferred from one person to another and from one post office to another.

What is the  Interest Rate offered by Kisan Vikas Patra?

The interest rate offered by post office is 7.3% , which is compounded annually. The rates are applicable from 1.01.2018.

What is the Minimum & Maximum Balance for Kisan Vikas Patra?

The minimum amount to open this account is Rs.1,000(in multiples of Rs.1,000). There is no maximum limit.

What is the maturity period for Kisan Vikas Patra?

The maturity period for Kisan Vikas Patra is 118 months and you can avail the corpus then. The maturity proceeds of KVP will continue to accrue interest till you withdraw the amount.

Who can open an account in Kisan Vikas Patra?

Certificate can be purchased by an adult for himself or on behalf of a minor or by two adults.

When you can encash the scheme?

Certificate can be en ​cash after 2 & 1/2 years from the date of issue.

 

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