Post Office Savings Scheme - Types, Benefits and How to Invest in 2023

As the name suggests, the post office savings scheme includes saving instruments, offering several reliable and risk-free returns on investments. In India, you can open a savings account at a post office in several ways. These offer fixed or recurring deposit policies and attractive fixed interest rates. It is a beneficial scheme for the investors to securely earn a fixed interest on their deposit amount in periodic intervals.

It is similar to a bank or NBFC account, but it is considered to be safer since it is directly under the central government. Besides, the post office has a greater reach, with offices in distant and rural regions providing greater access even to the most marginalised sections of Indian society.

The following table denotes all the post office saving schemes and their respective interest rates:

There are a plethora of benefits to opening a post office savings account. A few of them have been listed below:

• Post office savings schemes are highly secured since they are under the government's supervision, and the returns are fixed and guaranteed¹.
• Post offices are situated almost everywhere; hence there is higher reach, even in rural locales around India.
• There is a low minimum deposit that amounts to 50 rupees only, so even underprivileged people can avail of its benefits.
• There are many types of savings accounts to choose from that cater to almost every kind of individual.
• Most of these accounts don’t have a maturity period and can be withdrawn at any time and by anyone by producing the relevant documents and customer ID.
• These accounts can be transferred from one post office to another without much hassle.
• Most post office savings accounts also come with the benefit of ATM/Debit cards, so there is greater accessibility.
• Even minors can create a post office savings account, but the guardian or parent would manage the funds.
• A person can be nominated to whom the funds will be transferred on account of any unforeseen death of the account holder.
• An individual post office savings account can be converted into a joint account and vice versa.
• You can also open a post office savings account online through the IPPB app. So, it is quick and hassle-free.

Opening a post office savings account is simple. Visit your nearest post office and procure an account opening form of your choice. Submit the necessary documents and your account will be immediately created.

The following documents are required for opening a post office savings scheme account:

• Relevant account opening form
• KYC registration form
• PAN card, Aadhar, Driving license, Voter id for identity verification
• The amount to be deposited
• Job card or Proof of Employment, where applicable

• Step 1: Get approval from your nearest post office for internet banking. This may take up to 24 hours.
• Step 2: Visit the official Internet Banking portal of the Post Office or the IPPB app.
• Step 3: Select the Savings Account of your choice on the POB Products page and click on the ‘Apply Now' button.
• Step 4: Fil in all the required details such as name, date of birth, permanent address etc.
• Step 5: Upload all the required documents for verification.
• Step 6: Review your form and then click on ‘Submit’.

Usually, there are no additional charges or fees associated with opening a post office savings scheme account. Only the minimum deposit, along with the required documents, are required. However, charges are applicable for issuing a duplicate passbook, cheque book, and account transfers.

Follow the table below for the exact fees structure in a post office savings scheme:

The minimum deposit amount varies based on the type of post office savings scheme. While the savings bank account has a minimum deposit limit of ₹50, the RD account has a limit of ₹100. A post office TD account has a minimum deposit limit of 1000 rupees and no maximum limit.

A POMIS account has a maximum limit of ₹4.5 lakh for individual accounts and ₹9 lakh for joint accounts, and the minimum limit is ₹1000. For an SCSS account, the minimum deposit is ₹1000, and the maximum limit is set at ₹15 lakhs. For a PPF account, the minimum deposit is set at ₹500, and the maximum deposit is 1.5 lakh per financial year.

For SSA accounts, the minimum deposit is set at ₹250, and the maximum limit is 1.5 lakhs per financial year. NSCs don’t have any maximum limit, and the minimum amount is set at ₹1000. For KVP accounts, the minimum deposit required is ₹1000, and there is no set maximum investment limit. Moreover, there is no deposit necessary for the PM CARES for Children Scheme.

The premature closing of post office savings schemes varies depending on the type of account created. While the RD account can be prematurely closed after 3 years, a TD account can be closed within 6 months. There are no charges involved with a premature closing for the SB account.

For the premature closing of a POMIS account, there is a 1% deduction after three years and a 2% deduction if closed before three years. You can also close a POMIS account before one year with no benefits. For SCSS accounts, the deductions range from 1.5% before 3 years and 1 % between 3 to 5 years. There are no benefits if closed before one year.

For a PPF account, the closure is only allowed after 5 years with a 1% deduction on account of life-threatening ailments, death or if the resident Indian has gained an NRI status. SSA accounts can only be closed after 5 years on account of extreme compassionate grounds or unforeseen life-threatening events with no deductions.

NSCs can’t be closed prematurely unless there’s a court order or death of any of the holders. For KVP accounts, there are no premature withdrawal deductions after 2.5 years. There is also no premature closure for the PM CARES for Children Scheme.

The eligibility criteria for a post office savings scheme depend on the type of account created. More information about the eligibility can be found on the respective scheme pages. It is recommended you go through the official websites for the same.

• Any Indian adult is allowed to start a post office savings account.
• In the case of a minor, he/she must be at least 10 years old.
• On behalf of a minor, a bona fide guardian may also open a post office savings account.
• For joint accounts, two or three persons are allowed to open a joint post office savings scheme account.
• Even if a person is not of sound mind, he/she can open a post office savings scheme account.
• For non-general schemes such as the KVP accounts, the relevant eligibility may also depend on the nature of work, earnings, age, et al.