If you looking to save your money and earn high returns on it without risk, then this story is for you. Depositing in a post office savings account is a very good option for those who want to earn some extra benefits while saving your hard-earned money.
Along with offering higher interest rates, these accounts also help the depositors with tax savings on the interest of up to Rs 3,500 in a financial 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 come down. India’s largest public sector bank State Bank of India (SBI) has cut the interest rate to 2.7% annually. Many other banks have followed the suit. However, you can still avail 4% interest per annum on post office saving accounts.
To open an account in the post office, all you need is valid KYC documents. You will have to visit the nearest post office with an initial deposit of Rs 500.
It may be noted that the interest on the post office saving account is calculated on the minimum balance between the 10th and the last day of the month.
The minimum account balance to be maintained in the account is Rs 500 at the end of the financial year. If you fail to do so, the post office will deduct Rs 100 as the account maintenance fee. If the balance drops to nil, the account will be automatically closed.
Another thing to note is that the government reviews the interest rates on the post office saving account on a quarterly basis. Depending on the market, these rates can be changed. For the July to September quarter, the government has kept the interest rate unchanged.