How to Open Post Office Savings Account ? PO Account Opening Form | Interest Rate

One of the most popular and accessible savings accounts in India is a Post Office Savings Account. The minimum deposit and maximum balance that can be kept are both Rs.500. The current interest rate for this account is 4.00 percent per annum. It can also be opened in the name of a minor over the age of ten. An individual can only open one account as a single account. The maximum amount that can be placed in a post office savings account is unlimited. It is also eligible for a tax exemption under the Income Tax Act 80TTA for the interest of up to Rs.10,000 earned in a financial year (for all savings accounts combined).

Open Post Office Savings Account

About Post Office Savings Account

In many aspects, a Post Office Savings Account is identical to a standard savings account. It is regarded as a highly secure mechanism to deposit funds into, with the ability to liquidate funds in full or in part at very short notice if the need arises. These accounts often provide a guaranteed return on investment, making them perfect for senior persons and those seeking a steady income without risk.

To open a Post Office Savings Account, you must be an adult Indian citizen. To be eligible for a Post Office Savings Account, a minor must be at least ten years old. Two or three people are necessary to start a combined post office savings account.

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Process to Open a Post Office Savings Account

To open a post office savings account, follow these simple steps.

  • To obtain an application form, go to your nearest post office or visit India Post’s official website.
  • Complete the form with the necessary information.
  • Please provide all necessary documentation as well as a passport-sized photograph.
  • Deposit a sum of money that must be greater than Rs.20.
  • If you want to open a post office savings account without a check book, you must make a minimum deposit of Rs.50.

A maximum of Rs one lakh can be deposited by a single account holder, while a maximum of Rs two lakhs can be deposited by a joint account holder. Opening this type of account is extremely simple since one can walk into any post office, complete the necessary paperwork with the clerk, and start an account right away.

New Service Fees on Savings Accounts at the Post Office

If you wish to open a post office savings account, keep in mind that there are a few service fees to consider:

  • The cost of issuing a duplicate cheque book is Rs.50.
  • Deposit receipts are issued at a cost of Rs.20 per receipt.
  • Account statements are issued at a cost of Rs.20 each statement.
  • Rs.50 for cancellation or alteration of nomination.
  • In lieu of a missing or mutilated certificate, a passbook will be issued at a cost of Rs.10 per registration.
  • Issuing a check book from a savings account: There will be no price if you take up to ten leaves in a fiscal year. (Thereafter, Rs.2 per cheque leaf)
  • For transferring and pledging an account, Rs.100 is charged
  • Fee for a dishonoured check is Rs.100.

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Eligibility to Open a Savings Account at the Post Office

Following is the eligibility criteria to open a Post Office savings account.

  • Minors under the age of ten years
  • A person of unsound mind who acts as a guardian on behalf of a minor
  • A joint account can be opened by two or three persons.
  • Accounts such as Group Accounts, Institutional Accounts, and Security Deposit Accounts & Official Capacity Accounts are not permitted.

Post Office Savings Account Interest Rates

The interest rate on Post Office savings accounts is set by the Central Government on a regular basis and ranges from 3% to 4%. Interest is calculated monthly and credited once a year.

PO Accounts pay a fixed rate of interest throughout the year, which is subject to alteration as needed. The current interest rate is as follows:

Post Office Savings Account Interest Rate = 4% p.a

More Post Office Investment Options

Investment OptionRate of Interest (p.a.)
Public Provident Fund (PPF)7.1% compounded annually
Senior Citizen Savings Scheme (SCSS)7.4%
Kisan Vikas Patra (KVP)6.9 % compounded annually
Sukanya Samriddhi Yojana (SSY)7.6%
Post Office Monthly Income Scheme (MIS)7.3 % payable monthly
National Savings Certificate (NSC)6.8 % compounded annually

Withdrawals from a Post Office Savings Account

The amount put in a PO Account can be withdrawn at any time to meet the depositor’s needs. Remember that the withdrawal is conditional on maintaining a minimum balance of Rs. 50 in a simple account and Rs. 500 in accounts with a cheque option.

PO Account Features

The major characteristics of a Post Office savings account are mentioned below:

  • You have the option to close his or her account at any time.
  • Accounts can be operated by minors over the age of ten.
  • At least one deposit or withdrawal must be made every three years to keep the account operational.
  • Only cash can be used to open the account.
  • The facility of nomination is provided both at the time of account opening and afterward.
  • Interest is tax-free up to a limit of Rs 10,000 per year.
  • The amount of interest is eligible for income tax reduction under section 80L of the Internal Revenue Code.
  • It is possible to move the account from one post office to another.
  • Accounts can be converted from single to joint and vice versa.
  • In CBS Post offices, deposits and withdrawals can be made using any electronic method.
  • ATMs are available for transactions.

Benefits of a Post Office Savings Account

Customers who open these accounts have access to check-writing and ATM services. Advantages of Post Office Savings Accounts are mentioned below:

  • Checking account: Cheque service is provided and can be requested for both new and existing accounts.
  • ATM/Debit card: CBS Post Offices can provide ATM/Debit cards to account holders who have maintained the required minimum amount on the day the debit card is issued.
  • Minor Accounts: Minors can open a Post Office Savings Account. An account can be opened in the name of a minor under the age of ten, but the parent or guardian will have the authority to administer the account on their behalf. Accounts can be operated independently by minors over the age of ten.
  • Portability: If you move, are dissatisfied with the services provided by the post office branch, or for any other reason, you can transfer your PO Account to another branch.
  • Nomination: These accounts allow you to nominate someone at the time of account opening. At any time, the account holder can choose a person to receive the proceeds of the account following their death.
  • Joint Accounts: The joint account facility allows two or three adults to have an account together. It means you can convert a single account to a joint account and vice versa.
  • Customers can make electronic withdrawals and deposits at CBS Post offices using any electronic means.
  • Long-time of inactivity: To keep your account active, you just need to make one deposit or withdrawal per three financial years. Unless there have been no transactions for three financial years, the account would be considered dormant.

FAQ’s

In the case that the depositor dies, what happens to the money?

If the depositor dies, the money will be directly distributed to the nominee. If there is no nomination on the account at the time of the depositor’s death and the amount due is less than Rs 60,000, the Department of Post Office may pay it to a person who appears before him and is authorized to receive it or to administer the deceased’s estate.

What is the maximum number of accounts that can be opened at a single post office?

At each post office, only one account and one joint account can be opened.

Is it possible to get a duplicate passbook?

Yes, Only the sub-post offices can provide you with a duplicate passbook. To apply for a duplicate passbook, fill out the necessary form or submit a manuscript application along with the prescribed fee, if applicable, in the form of a postage stamp.

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