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Most people prefer having a savings account since it is easy to make deposits to the account and withdraw the money when there is a need. The criteria to open and maintain a savings account has been relaxed lately as compared to the olden days. Also, one can earn a reasonable interest on the account balance.
Similar to that with a bank, you can open a savings account with Post Office as well. Post Office Savings Account comes with attractive interest rates and other benefits.
Here is everything you should know about a Post Office Savings Account.
Budget 2021 update :It has been proposed to exempt the senior citizens from filing income tax returns if pension income and interest income are their only annual income source. Section 194P has been newly inserted to enforce the banks to deduct tax on senior citizens more than 75 years of age who have a pension and interest income from the bank.
The post office savings account is a deposit scheme provided by the post office throughout India. The account provides a fixed interest rate on the account balance. It is a beneficial scheme for individual investors who wish to earn a fixed rate of interest by investing a significant portion of their financial assets.Post office savings account is also a very helpful scheme for those residing in rural parts of India. Since the nationwide reach of the post offices is much greater as compared to banks, a large number of unprivileged people have been able to get access to savings accounts through post offices.
The central government decides the interest rates on the post office savings account. It is at 4% and it is calculated every month. According to the income tax regulations, if a post office savings account holder generates returns lower than Rs. 10,000 a year through interest, then it is tax-free.
Opening a savings account through post office is way easier than savings accounts in banks. Let us take a look at its benefits.
The money deposited in a post office savings account can be withdrawn any time when the depositor needs. Only thing is a minimum balance of Rs. 50 should be maintained in case of a generic account and Rs. 500 in case of cheque facility.