Everything That You Must Know About Post Office Savings Account
Published On Feb 17, 2022 10:25 AM By InsuranceDekho
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A Post Office Savings Account is one of India's most popular and easily accessible savings accounts. The minimum opening balance and maximum balance that can be held are both Rs.500. Currently, the interest rate on this account is 4.00 percent p.a. It can also be opened in the name of a minor over the age of ten. The 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 tax exemption for the interest of up to Rs.10,000 earned in a fiscal year (for all savings accounts combined) under Section 80TTA of the Income Tax Act.
Features of Post Office Savings Account
The following are the primary characteristics of a Post Office savings account:
- You have the option to close his or her account at any time.
- Minors over the age of ten can use their accounts.
- To keep the account open, at least one deposit or withdrawal must be made every three years.
- The account can only be started with cash.
- The nomination function is available both when the account is opened and after it has been opened.
- Earned interest is tax-free up to Rs 10,000 per year.
- Income tax reduction is given on the amount of interest paid under the terms of Income Tax Act Section 80L.
- Single accounts can be converted to joint accounts and vice versa.
- In CBS Post offices, deposits and withdrawals can be made using any electronic method.
- ATMs are available for transactions.
Advantages of a Post Office Savings Account
Customers who want to open these accounts can do so using a check or an ATM. The following are some appealing Post Office Savings Account Benefits:
1. Payment by check: Cheques are accepted and can be obtained for current accounts as well.
2. ATM/Debit card: CBS Post Offices can provide ATM/Debit cards to account holders who have maintained the necessary minimum amount on the day the debit card was issued.
3. Accounts of Minority: Minors can open a Post Office Savings Account. Minors under the age of ten can have an account opened in their name, but the parent or guardian will have the authority to administer the account on their behalf. Minors aged 10 and up can operate the account on their own.
4. Portability: If you move, are dissatisfied with the services of a post office branch, or for any other reason, you can transfer your Post Office Savings Account to a location of your choice. In each post office, only one account can be opened.
5. Nomination: The ability to nominate someone is made available with these accounts at the time the account is opened. The account holder may also designate someone to receive the account's proceeds after their death at any time.
6. Tax Exemptions: The joint account facility allows two or three persons to keep an account together. A single account can be made into a joint account, and vice versa.
The 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 tax exemption for interest of up to Rs.10,000 earned in a fiscal year (for all savings accounts combined) under Section 80TTA of the Income Tax Act.
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Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.