You need a saving account for day-to-day transactions or parking extra money. You have options to open a saving account in a private bank or a public sector bank. There is an additional option that you have. You can also open your saving account with the post office. Yes, that is right, the post office has a bank, and you can open a post office saving account. The post office saving account has many advantages over the regular account as it offers more interest and it has a lower risk of default.
You can learn more about the post office saving account on this page today. Go ahead and check out the details below.
🤔 What is a Post Office Savings Account?
Just like a regular savings account, you can open a post office saving account. The only difference is that the savings account is opened in a bank, whereas the post office saving account is opened in the post office. Most of the post offices in India offers banking service. This was the government’s game plan to help people with financial inclusion. Even if there is no bank in a village, there will surely be a presence of a post office in the vicinity. Offering banking services through the post office meant that people wouldn’t have to travel a lot to open an account or to avail of banking facilities.
Moreover, many saving schemes are delivered through post office saving accounts. So, having a saving account with the post office is always beneficial, especially if you live in a remote area. The post office is present nationwide, so it is easy to get banking services. Move on to the next section to check the advantages and disadvantages of the post office saving account.
👍 Advantages of Post Office Savings Accounts
Here are some of the advantages of post office saving accounts. Check them out below.
- Low Minimum Balance – The first thing you will notice about the post office saving account is the low minimum balance. This minimum balance requirement in rural and semi-urban areas is just Rs 20. You need to maintain only Rs 500 as the minimum balance in urban areas. This way, you don’t have to worry about maintaining funds in your account.
- Higher Interest Rate – As per a general observation, the post office saving account offers a higher interest rate when compared with the regular savings account. This means you will have a higher interest income when you park your funds in your savings account. In addition, you don’t have to pay any tax on up to Rs 10,000 interest income in any bank account.
- Low Risk – The post office bank is maintained and funded by the government of India. It is a profit-making entity; hence, there is very low risk associated with the post office saving account. You won’t hear the news of post office banks defaulting or closing down anytime in future.
- Higher Inclusion – Post office bank is present across the country. They are present even in small villages and towns. This way, you get a higher inclusion. You can avail of post office saving account services even in the most remote part of India.
- ATM & Debit Card – The post office bank has modernized its core banking solution. Today, you get online banking services and an ATM cum Debit card with your post office saving account. There was a time when you had to visit the post office to update your passbook, but today, all these details are visible on net banking. Moreover, the debit cum ATM card has made it easy to transact.
- RD & FD Facility – In addition to all the benefits listed above, the post office saving account enables you to create fixed and recurring deposits quickly. The advantage is that you get higher interest rates with the post office FD & RD.
- Portability – Since the post office bank is present in every nook and corner of the country, you can move your account to any city, town or village. If you have a job that includes frequent transfers, then a post office saving account is for you.
👎 Disadvantages of Post Office Savings Accounts
The disadvantages of post office saving accounts are listed below.
- Lacks Online Service – Post office saving account doesn’t offer many online services. The user interface is also not very friendly. You will not be able to purchase mutual funds through your post office saving account. You can only rely on RD and FD for your investment solutions if you have a post office saving account.
- Higher Lead Times – The lead times to avail of any service through a post office saving account are usually higher. The single window banking system model can lead to longer queues, so you must wait for your turn. The higher lead times can lead to customer dissatisfaction, so you need to make a trade-off here.
- No Loans – The post office saving account doesn’t offer any borrowing services. You can’t get a loan or a credit card for your post office saving account. So, if you plan to open a post office saving account, please ensure you have the right expectations.
Conclusion
The step taken by the government to offer core banking services through post office saving accounts was a great decision. It has to lead to higher financial inclusions. We believe it would have been better if the post office bank offered other add-on services. Apart from this, you must have a post office saving account if you are looking for higher returns on your risk-free savings.
Post Office Saving Accounts Frequently Asked Questions
Q1. Should I Open a Post Office Savings Account?
It depends on your need if you wish to open a post office saving account or not. If you often invest in the post office savings scheme, you can open a post office savings account. If not, then you can give it a skip. Any Indian adult can open a post office savings account. In addition, parents can open a post office saving account for minors if the minor is over ten years of age. Opening a joint account with up to three members is also possible. Lastly, you would need to submit a physical application to the post office to open the post office saving account.
Q2. Does The Post Office Provide ATM Cards For Their Savings Accounts?
Yes, you can get an ATM card for your Post Office savings account, but it’s a good idea to check with your local Post Office branch to find out if this option is available for your specific type of account or not.
Q3. Are There Any Fees Or Charges Associated With A Post Office Saving Account?
Nope, generally, there are no fees or charges for opening or maintaining a Post Office savings account. However, be aware that there may be some penalties for withdrawing your money early, and other services like checkbooks or ATM cards may come with associated fees. If you’re not sure, it’s best to check with your local Post Office branch to learn more.
Q4. Can I Manage My Post Office Saving Account Online?
Yes, you can manage your Post Office savings account online through their official website! This means you can check your account balance, view transactions, transfer funds, and more from the comfort of your own computer. Keep in mind that the specific online features available may vary depending on the type of savings account you have.
Q5. What Does The Money Deposit Procedure Look Like With A Post Office Savings Account?
When you want to deposit money into your Post Office savings account, it’s easy! Just head to any Post Office branch and deposit your money in cash, cheque, or demand draft. Some types of accounts may also allow for electronic fund transfers. After you deposit your money, it’ll start earning interest based on the applicable interest rate for your account.
