Post office savings account: Here's all you need to know

India Post has various deposit schemes, which are backed by the central government. Among them is the savings account, which offers 4% interest per annum.

The minimum balance required to be maintained in a savings account is Rs 500. If the account fails to maintain that amount, a maintenance fee of Rs 100 is charged on the last working day of each financial year and after deduction of the, if the balance in the account becomes nil, the account stands closed.

The minimum withdrawal amount is Rs 50 while there is no maximum limit on withdrawal and deposits in the case of post office savings account.

Interest is calculated on the basis of the minimum balance between the 10th of the month and the end of the month.

No interest is allowed in a month if the balance between the 10th and the last day of the month is below Rs 500.

Interest is credited in the account at the end of each financial year at the interest rate set by the Finance Ministry. Interest earned up to Rs 10,000 in a financial year is exempted from taxable income.

The account can be opened by visiting the nearest post office. An adult, a guardian on behalf of a minor, a guardian on behalf of a person of unsound mind, a minor above 10 years in his own name can open post office savings account. After filling the application form, customers can visit the nearest post office branch and submit the duly filled form along with the necessary KYC documents.