What is Post Office Savings Account?
The Post Office Savings Account is a savings and investment option offered by the government of India through the India Post Office. It is a safe and secure investment option that allows individuals to earn a fixed rate of interest on their savings. The Post Office Savings Account is a flexible investment option, as the individual can choose the amount of money to be deposited and the frequency of deposits.
Eligibility for Post Office Savings Account
Any resident Indian individual can open a Post Office Savings Account, including minors who can open the account through a guardian. Non-resident Indians (NRIs) are not eligible to open a Post Office Savings Account.
How to Open a Post Office Savings Account
The Post Office Savings Account can be opened at any designated post office in India. To open a Post Office Savings Account, the individual must fill out an application form and provide proof of identity and address. The minimum investment amount for the Post Office Savings Account is INR 500 (Indian Rupees).
Interest Rate on Post Office Savings Account
The interest rate on the Post Office Savings Account is determined by the government and is reviewed periodically. The current interest rate on the Post Office Savings Account is 4% per annum, compounded quarterly.
Tax Benefits of Post Office Savings Account
There are no tax benefits on amount kept in Post office savings account and the interest on it is taxable. However one can get exemption under sec 10(15)(i) on the interest earned upto a certain limit
Conclusion
The Post Office Savings Account is a savings and investment option for small income earners. As the post office has wide reach till the nook and corners of the country so it is a popular choice for people not having any access to banking facilities