You can get tax exemption on a fixed amount in the savings account of the post office. There is separate provision for single and joint accounts. In the post office, you get the benefit of more interest and tax exemption than banks.
Most of the people prefer to open an account in the post office for safety and better returns. Now those having savings account will be more benefited because they can get tax exemption in it. If someone has a single account, then interest earned up to Rs 3,500 in a financial year will not attract any tax. At the same time, up to Rs 7,000 will be tax free on the joint account.
You can earn an interest rate of around 4% on a post office savings account. At the same time, the interest rate on the savings account of the country’s largest bank, State Bank of India (SBI) is just 2.7%. In such a situation, those opening the account in the post office will get more benefit. The facility of tax exemption along with higher interest rate in post office makes it more attractive as compared to bank savings account.
The Post Office Small Savings Scheme is one of the most preferred options among retail investors as it offers higher interest rates than other schemes. Interest rates on small savings schemes including post office savings accounts are reviewed on a quarterly basis. For the July to September quarter, the government has not made any change in the interest rate on small savings schemes.
Post office savings account can be opened by depositing a minimum of Rs 500. Interest on Post Office Savings Account is calculated on the minimum balance between the 10th of every month or the last day of the month. 100 is deducted as maintenance charges. If the account balance becomes zero then the account will be closed automatically.
Zero balance account opening facility
The Finance Ministry had issued a notification on April 9, 2021 regarding the savings bank account in the post office. In which it was told that who can open a savings account on zero balance. In this, any common person who is a registered adult member of any government welfare scheme and in the case of a minor by the guardian whose name is registered for any government benefit, they can take advantage of this.
