Post Office vs Bank Savings
While researching the interest rates of the bank’s savings account, I discovered the power of the post office savings account scheme and I hesitated to look back to the banks.
Why ? because of the features and the benefits and I am damn sure you would just create at least one account of your as only one account can be created at PO.
Even the best government banks in India cannot provide this kind of savings account. Not competing with the bank but here at investmentpedia we only care for our readers, so why not tell you that you can invest your money to a safer, trusted, and moreover to a government body which is profitable for you.
Our respectable prime minister Shri Narendra Modi ji’s dream was of opening a bank account for every individual in the country has been easier due to the post office.
Leaving all the reviews and critics behind there are some good things to say that’s better than a bank’s saving account.
So, let’s start with all the important aspects that you need to know before you create a savings account with them. All the documents shown are on evidence or the documents on the internet.
Benefits of post office savings account
- Higher Interest rates
- Lowest maintenance balance
- Anyone can create an account
- Fewer penalty deductions compared to banks
So why is it that I am claiming post office savings are better than bank’s saving ?
When it comes to bank’s it’s obvious that they are the biggest asset and institution of the country especially speaking for India.
Banks provide the most financial services to a citizen and other premium services too for the premium members having platinum or premium debit/credit card. But ever thought of a thing?
Do you need all the services that they provide?
Let me assume that you are just a normal citizen may or may not be a government employee and after all, you need to save something for your future that’s an absolute reason to invest here on the post office, maybe the funds you want to invest are just halting in your bank or do have a certain amount of cash deposit in your home.
So are you earning something, yes in the bank but not as much as the money worth it.
- Interest Rate ~
But here you get a 4% interest rate per annum which is absolutely mind-blowing. Trying the PO service would be no-harm and I have enough points to support so…
If you want to calculate, I have given a website from economic-times that redirects you to a tool to calculate the interest gained.
- Minimum Balance ~
Let’s get to the second point why you should choose PO savings, i.e minimum balance to be maintained is 500 for the cheque account, and only rs 50 for a non-cheque account.
I have added a screenshot below from the post office FAQ section to justify my statement.
Considering the need you only need to save some of the unused money that can just be started with a nominal charge.
Even many of the govt. and private banks do have a minimum balance of 1000 rs to be maintained ignoring the 0 balance accounts which are different as compared to the normal accounts.
- Penalty Charges ~
Now the third point is the fees and the penalty charges, the banks charge way higher than you might think of, at every stage from atm transactions to the net-banking facilities but however ignoring those extra benefits that they provide. We need nothing but a bank that takes care of our money and provides us with the most amazing interest rates.
But in case of post office savings account it’s easy, and in banks, they charge you a minimum of 100rs + GST is chargeable on a duplicate passbook but in PO savings it’s only 50 and GST may apply but the point is it’s half the price.
Coming to the next charge in case of cheque bounces, banks charge a hefty amount starting from 100, but in PO it’s only 50 rs.
And there are many other additional charges that are either nil or less as compared to banks. You can check them at Indianpost website.
- Limitations ~
It is not possible for any product or service to become absolutely perfect, by not telling about the limitations or flaws you couldn’t identify if the service is actually meant for you.
Every product or service has its targeted audience, but because of government property it’s 100% safe and legit, our prime minister had to dream to serve every non-banker, so to have one bank account.
The banks aren’t that evil that you might think from this article, I have just clarified the doubt that had been going around you.
Let me tell you honestly, the first thing that disappointed me is their website that’s too slow and sometimes doesn’t load.
Secondly, having the net-banking and mobile banking facility, it’s mainly offline centric because if you have ever created an account you have encountered any of the agents who promote it.
If you have opted-in for the ATM facility, you might face difficulty in finding ATMs near you because of the lack of such machines, as per livemint PNB ATMs are also free for PO bank customers.
After going deep into the topic, It was clear that PO savings bank is going to become a small finance bank and there’s no harm in it but restricts us in some conditions like a single account holder can only save up to 1 lakh and a joint account has a limit of 2 lakhs.
Along with that some of the charges that are higher than the banks, a clear perspective is only possible if every individual try out that has to be fulfilled.
Lastly, if you have a normal usage with no less and high demand for services and products, government banks are the best option for you. But besides having that, create an account on the PO to save and allow yourself to spread the money wisely to different institutions.
Q. What is post office saving scheme ?
Ans. The post office saving scheme is an Indian government initiative to introduce some of the disciplinary ways of saving money for the Indians who don’t have access to banks.
Q. Which saving scheme is best in post office ?
Ans. As per the highest interest rates, Senior Citizen Savings Scheme has an interest rate of around 8.6% per annum which stands the highest but as we are only discussing savings account the leftover schemes are the National Savings Account or Post Office Savings Account can be used, both have its merit and demerits.
Q. How much cash can be withdrawn from the post office savings account ?
Ans. In a day, a person can only withdraw up-to 25,000. And in a single transaction, the limit is up-to 10,000 rs.
Q. What is the interest rate of post office savings account ?
Ans. The post office savings account has a steady interest of 4% per annum.