Apart from your regular savings account in a bank, you can also open one in your local post office. These pay the same interest rate—3.5% per annum—as bank savings account. If you are wondering why have an additional savings account, here’s how you can use them. Since the minimum balance requirement of a post office savings account is very low, you could help your domestic help or driver to get access to a savings account through it. This account can be opened at any post office.
Who can open
Any adult Indian national can open this account. It can be opened individually. Two-three people can open it jointly, too. A non-resident Indian cannot open this account, as per India Post website.
The best part about this savings account is that it can be opened with a minimum deposit of Rs50. Moreover, you get income-tax exemption on the amount of interest you earn in this account, under the provisions of section 10 subsection 15 of the Income-tax Act.
Maximum deposit: An individual account holder can deposit a maximum of Rs1 lakh, the limit is Rs2 lakh for joint holders. If you have more than one account , the balances in all such accounts taken together should not exceed Rs1 lakh for each of the account holder.
Cheque book facility: You can either open a simple savings account with no cheque book facility or one that comes with this facility. You need to maintain a minimum balance of Rs50 for savings accounts without cheque facility. For savings accounts that come with cheque book facility, the minimum balance that you need to maintain is Rs500.
Passbook: This account comes with a passbook, wherein all the transactions are entered and duly stamped by the post office.
Inoperative accounts: If you do not use the account continuously for three years, the account is treated as a silent account. A service charge of Rs20 per year is charged on the last day of each year, until the account is reactivated. You can reactivate the account by making any transaction.
No ATM facility: One limitation that this savings account has is that it does not provide the automated teller machine (ATM) facility.