NEW DELHI: Are you hoping to get more bang for your buck with your hard-earned cash? It’s a good idea to put money into a post office savings account because it offers two benefits in addition to greater interest rates than conventional banks. Depositors will also be exempt from paying tax on interest of up to Rs 3,500 every financial year. In the case of a joint account, the exemption is increased to Rs 7,000.
In recent years, interest rates have dropped dramatically. For example, India’s largest public sector bank, State Bank of India, has lowered its annual interest rate to 2.7 percent. Post office savings accounts, on the other hand, continue to pay a 4% interest rate.
To open a savings account at the nearby post office, you’ll need acceptable KYC paperwork as well as a Rs 500 initial deposit. As a result, interest on the post office savings account is computed on the lowest balance between the 10th and the final day of each month.
However, if a customer’s account balance falls below Rs 500 at the end of the fiscal year, the post office would waive Rs 100 account maintenance fee. The post office savings account will be automatically closed if the amount reaches zero.
Small savings instruments, such as post office savings accounts, are preferred by many retail investors because they provide a higher return than traditional savings accounts. The post office saving scheme is nearly risk-free, making it a good choice for investors who don’t want to risk their money in the hopes of a higher return.
The interest rates offered by this scheme are reviewed by the central government every quarter and alter according to market conditions. The administration held the interest rate at the same level from July to September.