The government has increased the interest rates for a few small savings schemes for the October-December quarter of the fiscal year 2023. However, there was no change in the interest rates for many schemes including Public Provident Fund (PPF), National Savings Certificate (NSC) and Post Office Savings.
Over the years, post offices have devised numerous small savings plans to cater to the needs of the investors, mostly in small towns and rural areas. Currently, 4 per cent annual interest rate is offered on post office savings for individual and joint accounts. In addition, up to Rs 10,000 of the interest paid in a fiscal year is tax-free.
For savings accounts with cheque book access, a minimum balance of Rs 500 is usually required to be maintained. Nomination is required while opening an account and it is not permitted to convert a single account to a joint account or vice versa.
A post office savings account allows a minimum withdrawal of Rs 50. The account should have a minimum balance of Rs 500 and withdrawals below this amount are not allowed.
Similarly, a penalty of Rs 50 for non-maintenance of the minimum balance will be charged if the balance is below Rs 500 at the end of the financial year.
The minimum amount between the tenth and the end of the month will be considered to calculate the interest. No interest will be paid for the month if the balance of the account on the 10th and the last day is less than Rs 500 in a particular month. At the end of each fiscal year, the account will be credited with interest at the rate set by the Ministry of Finance.
Here are some of the facilities that can be availed on post office savings accounts:
1. Cheque book
2. ATM Card
3. Aadhaar Seeding
4. Atal Pension Yojana (APY)
5. Pradhan Mantri Suraksha Bima Yojana (PMSBY)
6. Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)
7. E-banking/mobile banking.
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