If you are looking to save your money and earn high returns with no risk, then this story is for you. Depositing into a Postal Savings Account is a very good option for those who want to earn extra benefits while saving your hard earned money.
In addition to offering higher interest rates, these accounts also help depositors to save on interest tax of up to Rs 3,500 during a fiscal year. For joint accounts, the exemption goes up to Rs 7,000.
In recent times, the interest rate offered by most banks on savings accounts has fallen. India’s largest public sector bank, the State Bank of India (SBI), has cut the interest rate to 2.7% per annum. Many other banks have followed suit. However, you can still earn 4% interest per annum on postal savings accounts.
To open an account at the post office, you only need valid KYC documents. You will need to go to the nearest post office with an initial deposit of Rs 500.
Note that the interest on the postal booklet is calculated on the minimum balance between the 10th and the last day of the month.
The minimum account balance to be kept in the account is Rs 500 at the end of the financial year. If you don’t, the post office will deduct Rs 100 as an account maintenance fee. If the balance drops to zero, the account will be automatically closed.
Another thing to note is that the government reviews the interest rates on the Post Office savings account on a quarterly basis. Depending on the market, these prices can be modified. For the July to September quarter, the government kept the interest rate unchanged.