Post Office Schemes: Good news for savings account holders! Withdrawal limit hiked from Rs 5,000 to Rs 20,000 at these branches

Post Office Schemes: In a bid to provide relief to the rural Post Office Savings Account holders, India Post has announced it will raise the withdrawal limit at Post Office GDS (Gramin Dak Seva) Branches. Now the withdrawal limit per individual will be Rs 20,000 instead of Rs 5,000. The move is expected to help Post Office Saving Schemes to match rival banks and increase post office deposits in the coming time. 

Hailing the India Post's move to raise withdrawal limit per individual from Rs 5,000 to Rs 20,000 for Post Office Savings Account in GDS branches, SEBI registered tax and investment expert Jitendra Solanki said, "The move will help increase post office deposits in future. In the recent times, post office deposits have gone down and allowing an individual to withdraw up to Rs 20,000 is a move that will bring Post Office Small Saving Schemes on the same level as proper banks."

Solanki went on to add that in current times, proper banks are allowing withdrawal as per the bank debit cards held by the savings account holders. But, in actual, majority of the ATM don't dispense more than Rs 10,000 in one transaction in the rural area. So, India Post move is expected to infuse fresh oxygen in the financial inclusion bid of the central government and at the same time it will attract some new depositors in various Post Office Saving Schemes that include Post Office Savings Account as well.

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At a time, when various banks are cutting savings account interest rate, post office savings account interest rate is at 4 per cent per annum. The minimum amount withdrawal allowed in post office savings account is Rs 50 and one can open Post Office Savings Account with minimum deposit of Rs 500. Post office savings account minimum balance is Rs 500 and in case account balance not raised to Rs 500 at the end of financial year, Rs 100 will be deducted as Account Maintenance Fee and if account balance became Nil, the account shall stand automatically closed.

Post office savings account interest rate calculation

1] Interest will be calculated on the basis of minimum balance between 10th of the month and end of the month and allowed in whole rupees only;
2] No interest will be allowed in a month if balance between 10th and last day of the month falls below Rs 500;
3] Interest shall be credited in account at the end of each Financial Year at the interest rate prescribed by the Ministry of Finance;
4] At the time of closure of account, interest will be paid up to the preceding month in which account is closed; and
5] Under Section 80TTA of the Income Tax Act, from all Savings Bank Accounts (both banks and post offices), interest up to Rs 10,000 earned in a Financial Year is exempted from taxable Income.