Post Office Savings Account: Opening account in Post Office is more beneficial than banks; know how

There are numerous benefits of investing in a Post Office. If you want to invest your hard-earned money without risk, then opt for opening an account in Post Office bank. Post Office deposits are considered to be a safe and secure mode of savings. It is preferred by senior citizens and individuals who want risk free investments. A Post Office savings account is similar to a regular savings account.

The good thing about Post Office accounts is that they offer a specified return on investment. People in rural and semi-rural areas are the major beneficiaries of Post Office accounts.

It is also considered more beneficial in the case of bank fixed deposits (FD). Its FD has been getting much better returns than banks. FDs in post office accounts get interest ranging from 6.25% to 7.5%. In the bank, this rate goes from 3.75 to 7.25%.

How to open an account in a Post Office?

1. Visit any Post office closest to you.

2. At the Post Office, ask for the savings account application form.

3. Fill in the Post Office savings account application form.

4. Submit the required KYC documents - identity and address proof.

5. Submit recent passport size photographs.

6. Once the form, documents and photographs have been submitted, make the initial deposit towards the account, which cannot be lower than Rs 20. The deposit has to be made in cash.

7. If you want to get a Post Office savings account without a cheque book, you will need to pay a deposit amount of at least Rs.50.

Benefits of opening Post Office savings account

• Post Office account holders can make nominations to their account. The nominee can operate the account on behalf of the account holder
• As per the wish of the account holder, the savings account can be transferred from one Post office to another - in case the account holder has shifted his/her house
• Minors above the age of 10 years can open and operate a post office savings account independently
• A post office savings account can be opened either by an individual or joint
• For the savings account to be deemed operational, account holders will have to make at least one transaction in three years
• Customers are offered a debit card when opening the post office savings account
• Individual savings accounts can be converted to a joint account on provision of KYC documents of the second party
• Customers can transfer the balance in their account from one post office to another following a transfer
• Savings up to Rs 10,000 inclusive of the interest are exempt for tax under section 80L of the Income Tax Act