In case, a post office savings account holder has zero balance in their account on the last working day of the financial year, the post office savings account would automatically get closed.

KEY HIGHLIGHTS:

  • Anyone who wishes to open a post office savings account will have to pay a minimum of Rs 500
  • The account can be opened by cash only, according to the India Post website
  • Post Office Savings Account holders are now required to maintain Rs 500 minimum balance in their post office savings account.

 The Department of Post recently increased the minimum balance limit from Rs 50 to Rs 500 for the savings account. The Department of Post issued Gazette notification in this regard. As per the changes, if a Post Office savings account holder fails to maintain Rs 500 minimum balance limit, then Rs 100 will be deducted as penalty from the Post Ofice SB account on the last working day of the financial year. 

The Post Office Directorate has directed all post offices to contact Post Office Savings Account holders and let them know that they are required to maintain Rs 500 minimum balance in their post office savings account. According to the Post Office Directorate, due to Rs 50 minimum balance limit in the post office savings account, the Indian post offices are losing around Rs 2,800 crore per annum. 

In case, a post office savings account holder has zero balance in their account on the last working day of the financial year, the post office savings account would automatically get closed. Note that anyone who wishes to open a post office savings account will have to pay a minimum of Rs 500. The account can be opened by cash only, according to the India Post website.

They can open the post office savings account in single, joint or in the name of their minor child. After opening the post office savings account, the account holder will be eligible for a cheque book and ATM facility. The account holder can nominate a nominee in the post office savings to account also.

The account holder needs to make at least one financial transaction (deposit or withdrawal) in three financial years to ensure operability. The interest earned against the post office savings account deposit is tax-free up to Rs 10,000 per financial year.

It is worth mentioning that post offices’ Public Provident Fund (PPF), tax-saving deposit schemes, National Saving Certificate (NSC), Sukanya Samriddhi Yojana (SSY), Senior Citizen Saving Scheme (SCSS), etc. are some of the most popular small saving schemes. These post office savings schemes are ‘EEE’ category saving scheme meaning investor gets income tax exemption on investment, the interest rate earned and the maturity amount.