Post Office Savings Account 2022

People mostly prefer to have a post office savings account as it becomes easy to deposit to the account. And at the time of need, the money can be easily withdrawn. Today the process to open a savings account has become easy when compared to the olden days. Moreover, on the account balance, the account holder earns reasonable interest.

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What is Post Office Savings Account?

The Post Office Savings Account is one deposit scheme that is provided by the India Post throughout the country. This savings account offers an interest rate on the balance in the account.

This scheme is beneficial for any individual investor who is looking forward to earning interest by simply investing a portion of the financial assets. This Post Office Savings Account remains popular amongst the rural part of India. The reach of the India Post is greater compared to any bank. The underprivileged people have easy access to a savings account via the post offices.

Basic Details of Post Office Savings Account

Scheme Name Post Office Savings Account
Rate of Interest 4% per annum
Minimum Investment Amount Rs. 20
Rs. 50 for account holders without a cheque book
Maximum Investment Amount No limit
Eligibility Individuals
Minors
Tax Exemption Interest up to Rs. 50,000 is exempted

How to Open Post Office Savings Account Online?

Anyone who wishes to open the Post Office Savings Account needs to follow the below steps:

  • Step 1: An individual can get the form online as well as by visiting the nearby post office. For senior citizens, separate forms are available.

  • Step 2: Once the application form is generated, fill in all the details required.

  • Step 3: Submit the form with all the required documents and a passport size photograph.

  • Step 4: Pay the initial minimum deposit amount, that is, Rs. 20 in general.

  • Step 5: In case the individual wishes to open the account without a cheque book then Rs. 50 deposit amount is required. 

Finally, after the completion of the above steps, the Post Office Savings Account Online will be opened in 2-3 business days.

Additional Charges Applicable On Post Office Savings Account

If an individual wish to open a Post Office Savings Account, then the following charges will be applicable and should be taken into consideration:

Services Offered Charges Applied
Provision of new or duplicate cheque book Rs. 50
Provision of receipt for deposits made Rs. 20 for every receipt
Provision of account statement Rs. 20 for every statement
Changes in nomination Rs. 50
Provision of new passbook Rs. 10 for every registration
Provision of transferring an account Rs. 100
Cheque dishonor Rs. 100

Eligibility to Open Post Office Savings Account

At the time of opening the Post Office Savings Account, the nomination is a mandate. The following can easily open the account:

  • Any single adult and as a single account, only one account can be opened by the individual.

  • Two adults that would be Joint A or Joint B. In case of demise of the joint holder, the surviving holder is going to be the holder solely and when the surviving holder has a single account, then the joint account needs to be closed.

  • A minor who is 10 years of age and above. This account needs to be opened in the name of the minor. Once the minor attains the majority, then along with the KYC documents fresh account opening form of the Post Office Savings Account need to be submitted at the respective post office for the conversion in the name respectively.

  • A guardian on behalf of the minor.

  • A guardian on behalf of the person of an unsound mind. This account needs to be opened in the name of the unsound mind.

  • It is to be noted that conversion of a single to a joint account and vice-versa is not permitted.

  • Group Accounts, Official Capacity Accounts, and Security Deposit Accounts are not eligible for Post Office Savings Account.

Interest Rate for Post Office Savings Account:

Take a look below to understand the interest rate:

  • The interest rate is 4% per annum on both individual and joint accounts.

  • The interest is calculated upon the minimum balance between the tenth and end of the month. This is permitted in whole rupees only.

  • No interest is permitted in a month when the balance between a tenth and the last day of a month is below Rs. 500.

  • The interest will be credited to the account towards the financial year-end at the interest rate that is prescribed by the Ministry of Finance.

  • During the closure of the account, interest will be paid to the month preceding in, which the account is closed.

  • Under Section 80TTA of the IT Act, from all of the savings bank accounts, the interest up to Rs 10,000 earned in the Financial Year remains tax exempted.

Other Post Office Investment Options

Scheme Interest Rate (Updated) Minimum Investment Maximum Investment Eligibility Tax Implications
Post Office Savings Account 4% Rs. 20
Rs. 50 (if not by  cheque)
No limit Individuals
Minors
Exempted Interest up to Rs. 50,000
Kisan Vikas Patra Account 6.9% per annum (Annually Compounded) Rs. 1,000 No limit Individual Interest is taxed but the maturity amount is tax-free
National Savings Certificates (NSC) 6.8% per annum (Annually Compounded) Paid at maturity Rs. 100 No Limit Individual Tax benefit up to Rs. 1,50,000 under Section 80C of the IT Act
National Savings Monthly Income Account 6.6% per annum payable monthly Rs. 1,500 For Individual holder Rs. 4.5 lakhs
For Joint holders Rs. 9 lakhs
Individual Interest earned is taxable with no deductions
National Savings Recurring Deposit Account 5.80% Rs. 10 No limit Individuals including Minors Exempted Interest up to Rs. 50,000
National Savings Time Deposit Account 5.5% – 6.7% Rs. 200 No limit Individual Section 80C deduction on deposits for 5 Years
Public Provident Fund Account (PPF) 7.1% per annum (Annually Compounded) Rs. 500 annually Rs. 1,50,000 annually Individual Tax benefits can be availed under Section 80C of the IT Act
Senior Citizen Savings Scheme Account 7.4% per annum (Annually Compounded) Rs. 1,000 Rs. 15 lakhs People above 60 and 50 years of age who have taken VRS or superannuation Tax benefits can be availed under Section 80C of the IT Act
Tax deductions if the interest earned is more than Rs. 50,000
Sukanya Samriddhi Account 7.6% per annum (Annually Compounded) Rs. 1,000 annually Rs. 1,50,000 annually Girl Child with age up to the age of  10 years Interest and maturity amount is tax-free under Section 80C of the IT Act

Post Office Savings Account Withdrawals & Deposits

All the deposits or withdrawals for the Post Office Savings Account will be only for whole rupees. Take a look below, to understand the deposits and withdrawals:

Minimum Deposit Amount Rs 500 (The following deposit should not be less than Rs 10)
Maximum Deposit Amount No limit
Minimum Withdrawal Amount Rs 50

Besides, no withdrawal will be allowed that affects reducing the minimum sum of Rs 500. At the end of the financial year, if the account balance is not raised to the sum of Rs 500 then Rs 100 is going to be deducted as the charge for the maintenance of the account. Also, when the balance in the account is nil thereafter the account will automatically stand closed.

Benefits of Post Office Savings Account

The following are the key benefits of opening an account online:

  • The account opening process of the Post Office Savings Account is hassle-free and swift.

  • The individuals can easily avail themselves of the tax benefits on the earned interest. The earned interest remains tax exempted; however, the tax benefits are as per the prevailing laws.

  • The account does not offer any lock-in or a maturity period, unlike any FD scheme.

  • The single account can be converted to a joint account and vice versa.

  • The Post Office Savings Account remains transferable from one branch of the post office to another.

What Does a Silent Account Mean?

When in the Post Office Savings Account neither any deposit nor withdrawal takes place for continuous three financial years, the account will be treated dormant or silent.

The revival of such an account will be done by simply submitting an application with the KYC documents along with a passbook at the respective post office.

Additional Benefits Post Office Savings Account

The following are facilities on the Post Office Savings Account that can be availed upon submitting the respective form at the respective post office:

  • Mobile banking/ e-banking

  • ATM Card

  • Aadhar Seeding

  • Cheque Book

  • Pradhan Mantri Jeevan Jyoti Bima Yojana

  • Pradhan Mantri Suraksha Bima Yojana

  • Atal Pension Yojana

FAQ's

  • Q. When is a Post Office Savings Account treated as a silent account? Is it possible to revive the account?

    In case there is no transaction for three consecutive financial years then the account is treated as a silent account. Anyone who wishes to revive such a silent account needs to apply for the same.
  • Q. In case the depositor passes away, what would happen to the account?

    After the demise of the depositor, the balance in the account will be given to the respective nominee. In case the amount is less than Rs 60,000 and has no nominee then the post office department will pay the amount to the appearing person before the person deceased and who is eligible to receive it.
  • Q. How to open the account?

    An application needs to be generated for the opening of the Post Office Savings Account. Fill the application form and attach all the relevant KYC documents and make the deposit to open the account.
  • Q. What are the important documents required to open the Post Office Savings Account?

    Anyone who wishes to open the account needs to submit the listed below documents:
    • Passport Size Photographs
    • Identity Proof: Aadhar Card, PAN Card, Driving License
    • Address Proof: Aadhar Card, PAN Card, Passport, Driving License
  • Q. Is it possible to check the account balance online?

    The India Post has recently introduced online banking and a mobile app for users to access the activities of the account. The individual needs to generate a user a user-id and likewise apply for the net banking services, to begin with.
  • Q. Can I transfer my account from one post office to the other?

    Anyone who wishes to do so can do it by submitting the required application and it will be taken care of.
  • Q. Do I get an ATM option or a debit card for the Post Office Savings Account?

    Not every post office offers such a facility; however, the individual can ask the post office for such an additional facility.
  • Q. What is the interest rate in 2022?

    The current interest rate is 4% per annum.
  • Q. Can I withdraw the money from the Post Office Savings Account?

    A premature withdrawal can be made as per the wish; however, the minimum balance of Rs. 50 from a generic account and a sum of Rs. 500 for the cheque facility needs to be maintained by all the account holders.
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