Know the difference: Post Office Savings Accounts vs India Post Payments Bank account

While the Indian postal service is as old as Independence, its banking products like the Post Office Savings Account (POSA) and Indian Post Payments Bank (IPPB) have started gathering steam lately.

India post has helped bridge the gap between the country’s rural population and banking system by offering doorstep services as well as zero balance account facilities.

However, it’s important to understand the difference between India Post’s various financial services in order to avail products that best suit your requirements.

Let us understand the key differences between POSA and IPPB:

1. While an IPPB account can be opened with zero balance, one must deposit Rs 20 to open an account in case of POSA. One needs to pay Rs 500 to open an account with cheque facility.
2. A minimum balance of Rs 50 is required for account without cheque facility and Rs 500 for accounts with cheque facility in case of POSA. No such requirements needed for IPPB accounts.
3. There is no upper limit balance for POSA accounts. However, under an IPPB savings account, holders cannot keep more than Rs 1 lakh. Balance above this limit automatically gets shifted to the linked POSA account.
4. IPPB has three kinds of accounts: Regular, Digital and Basic. There is no such classification under POSA.
5. POSA does not offer doorstep banking services but IPPB does.
6. POSA gives 4% interest rate per annum on individual/joint accounts while IPPB gives 2.75% per annum – both payable quarterly.