Post Office account balance: Avoid penalty, know about this new rule

Post Office Savings Account: The Department of Post has increased the minimum balance limit from Rs 50 to Rs 500. The Department of Post has issued Gazette notification in this regard. If a Post Office savings account holder fails to maintain Rs 500 minimum balance limit, then the Post Office will deduct Rs 100 as penalty from the Post Ofice SB account on the last working day of the financial year. 

The Post Office Directorate has directed the post offices to contact all Post Office Savings Account holders to maintain Rs 500 minimum balance in their post office SB account. The Post Office Directorate is of the opinion that due to Rs 50 minimum balance limit in the post office savings account, the Indian post offices are losing Rs 2800 crore per annum. It has instructed them to contact the post office savings account holder to inform them about the new post office saving account minimum balance limit rules and ask them to maintain their minimum balance limit in post office SB account, in case, they have below Rs 500 in their Post Office SB account. In case, if a post office savings account has zero balance in their account on the last working day of the financial year, the post office savings account would automatically get closed.

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From now onwards, anyone who wishes to open a post office savings account will have to pay minimum Rs 500. They can open the post office savings account in single, joint or in the name of their minor child. After opening the post office savings account, the account holder will be eligible for cheque book and ATM facility. Like bank savings account, the post office savings account holder can nominate a nominee in the post office savings account also.

Various post office unions are against this government's decision. The All India Postal Employees Union Group C is of the opinion that the majority of the post office savings accounts are in the rural area and people there may not be able to maintain this 10 times rise in the minimum balance limit rule. In that case, they may close their post office savings account rather than maintain Rs 500 in their post office SB account.

For information of the readers, post offices' Public Provident Fund (PPF), tax-saving deposit schemes, National Saving Certificate (NSC), Sukanya Samriddhi Yojana, Senior Citizen Saving Scheme, etc. are one of the most popular small saving schemes. These post office savings schemes are 'EEE' category saving scheme where the investor gets income tax exemption on investment, the interest rate earned and the maturity amount.