The government has increased interest rates for a few small savings schemes for the October to December quarter of fiscal year 2023. However, interest rates for many schemes have not changed, including the Public Fund Provident Fund (PPF), National Savings Certificate (NSC) and postal savings.
Over the years, post offices have designed many small savings plans to meet the needs of investors, mainly in small towns and rural areas. Currently, an annual interest rate of 4% is offered on postal savings for single and joint accounts. Additionally, up to Rs 10,000 of interest paid in a fiscal year is tax exempt.
For savings accounts with checkbook access, a minimum balance of Rs 500 must generally be maintained. Appointment is required when opening an account and it is not permitted to convert a single account to a joint account or vice versa.
A postal savings account allows a minimum withdrawal of Rs 50. The account must have a minimum balance of Rs 500 and withdrawals below this amount are not permitted.
Similarly, a penalty of Rs 50 for failure to maintain the minimum balance will be charged if the balance is less than Rs 500 at the end of the financial year.
The minimum amount between the tenth and the end of the month will be taken into account to calculate the interest. No interest will be paid for the month if the account balance on the 10th and last day is less than Rs 500 in any given month. At the end of each fiscal year, the account will be credited with interest at the rate set by the Department of Finance.
Here are some of the facilities that can be used on postal savings accounts:
2. Bank card
3. Aadhaar Seeding
4. Atal Pension Yojana (APY)
5. Pradhan Mantri Suraksha Bima Yojana (PMSBY)
6. Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)
7. Online Banking/Mobile Banking.
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