Post office savings account scheme: What is the new penalty for non-maintenance of minimum balance?

In good news for those having post office savings account, the penalty for non-maintenance of minimum balance in a post office savings account has been reduced to Rs 50 (Inclusive of GST) by the Ministry of Finance. Earlier the penalty for the same was Rs 100.

A post office savings account holder is required to maintain a minimum balance of Rs 500 and non-compliance will lead to charges being levied on the account holder. As per the new amendments in the post office account scheme, the penalty of Rs 50 has to be paid by the account holder if the minimum balance remains less than Rs 500 before the end of a financial year.

The crucial part is that if in case the account holder fails to keep the minimum balance and the penalty debited makes the account balance nil, the account will be automatically closed by the post office. Also, the account holder will earn no interest if the minimum balance is not maintained by the end of the financial year.

Silent account holders — the accounts where no transactions have been made for three consecutive financial years —are also required to maintain a minimum balance to avoid penalty for non-maintenance of the same.

To avoid this condition of maintaining a minimum balance, eligible individuals can opt for a zero balance post office savings account. Apart from the post office, many other banks also provide zero balance account.