Home/ Money / Personal Finance/  Post office savings account: Now, maintain minimum balance or pay fine

In an important announcement for post office savings bank account holders, Department of Post has said that now maintaining a minimum balance in Post Office Savings Account is mandatory. "Maintain a minimum balance of 500 in your savings account. Assure your savings account has a minimum balance amount by 11th December, 2020, failing which maintenance charge 100 plus GST will be deducted from your account."

Post office savings accounts currently offer 4% per annum while the minimum amount required for account opening is 500.

10 features of Post Office Savings account, according to India Post website:

(1) Minimum deposit amount: - Rs. 500 (subsequent deposit not less than 10 rupees)

(2) Minimum withdrawal amount: - Rs. 50

(3) Maximum deposit: - No maximum limit

(4) No withdrawal will be permitted which effect reducing of minimum balance Rs. 500

(5) In case account balance not raised to Rs. 500 at the end of financial year Rs. 100 will be deducted as Account Maintenance Fee and if account balance becomes zero the account shall stands automatically closed

6 )Interest is calculated on the basis of minimum balance between 10th of the month and end of the month and allowed in whole rupees only

(7) No interest will be allowed in a month if balance between 10th and last day of the month falls below Rs. 500

(8) Interest is credited in account at the end of each Financial Year at the interest rate prescribed by Ministry of Finance

(9) Under Section 80TTA of the Income Tax Act, from all savings bank accounts, interest up to Rs. 10,000 earned in a financial year is exempted from taxable income

10) If no deposit/withdrawal takes place in an account during continuous three financial years, the account shall be treated as silent/dormant. Revival of such account can be done by submitting application along with fresh KYC documents and passbook at concerned post office.

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Updated: 11 Dec 2020, 01:06 PM IST
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