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Post Office Savings Account: All you need to know
The PO savings account is among the most well-known and accessible savings accounts in the country.
A Post Office (PO) Savings Account is one of the most well-known and accessible savings accounts in the country. Also, under Section 80TTA of the Income Tax Act, a PO account is eligible for tax exemption for interest of up to ₹10,000 (for all savings account combined) earned in a financial year.
Here's what you need to about the PO account:
Eligibility: A single adult or two adults only; a minor who is at least 10 years of age; a guardian on behalf of a minor; and a guardian on behalf of a person with an unsound mind.
Interest rate: At present, an interest rate of 4% per annum is being offered for this account. The interest will be calculated on the basis of the minimum balance on the 10th and the last day of each month. If, during this period, the balance falls below ₹500, then no interest will be credited.
Deposit and withdrawal: While minimum deposit amount is ₹500, the minimum withdrawal amount is ₹10. However, there is no limit for maximum amount that can be taken out. Also, any withdrawal which will lead to the minimum amount falling below ₹500 will not be allowed.
At the end of each financial year, the account balance should be at least ₹500 or ₹50 will be deducted as Account Maintenance Fee. The account will be automatically closed if the balance becomes zero.
Silent account: If there has been no transaction from an account for three successive financial years, it will be considered silent/dormant. To reopen it, one has to submit an application along with fresh Know Your Customer (KYC) documents and passbook at the concerned post office.
Other facilities available: Cheque book, ATM card, net banking/mobile banking, Aadhaar seeding, Atal Pension Yojana (APY), Pradhan Mantri Suraksha Beema (PMSBY), and Pradhan Mantri Jeevan Jyoti Beema Yojana (PMJJBY).
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