Post Office Saving Account

Post office saving account is similar to a savings account in a bank. It is a safe instrument to park those funds, which you might need to liquidate fully or partially at very short notice. Post office savings accounts are especially suited for those living in rural and semi-rural areas where the reach of banks is very limited.

How to Open Account
The account can be opened at any post office with a minimum balance of Rs. 20. Maximum of Rs. one lakh for single account holder and Rs. two lakhs for joint account holders can be deposited. There is no lock-in or maturity period. One can just walk into a post office, meet the clerk, complete the formalities and the account would be opened.

Who can Open Account
Single account can be opened by an adult, a minor with minimum age of ten years, or a guardian on behalf of a minor or a person of unsound mind. Joint account can be opened by two or three adults.

Withdrawl of Money
The amount can be withdrawn anytime subject to keeping a minimum balance of Rs. 50 in simple account and Rs. 500 for cheque facility accounts.

Interest Paid
Rate of interest is decided by the Central Government from time to time. Interest is calculated on monthly balances and credited annually. Usually it is between three to four per cent.

Salient Features

Income Tax Benefit
Income tax relief is available on the amount of interest under the provisions of section 80L of Income Tax Act.

Benefit of Large Network
Post offices have the largest service network in India. Post men do their job even in remote regions of the country. There are places where you could see old post men riding on bicycles and distributing letters, being awaited so eagerly by the kith and kin of the people who are far from their families and friends. Reach of post offices is of course greater than banks and this is the reason behind the government introducing something like saving accounts through post offices. They can take the benefit of having saving accounts right to the people who need them the most. If one is living in a remote corner, sometimes it is better to have a savings account in a post office rather than a bank. Just because post office and postman is closer to him.