Post Office Savings Account: Check eligibility, tax exemption, better returns and more

In order to open a savings account at the nearest post office, one would require valid KYC documents along with an initial deposit of Rs 500.

Are you looking to earn more benefits from your hard-earned money? It would be apt to deposit in a post office savings account as it brings dual benefits along with offering higher interest rates than regular banks. Also, depositors won’t have to pay tax on the interest of up to Rs 3,500 in a financial year. When it comes to a joint account, the exemption goes up to Rs 7,000.

The interest rates have significantly declined in recent years. For instance, the interest rate offered by India's largest public sector bank State Bank of India has come down to 2.7 percent annually. But, post office saving accounts are still offering a 4 percent return.

In order to open a savings account at the nearest post office, one would require valid KYC documents along with an initial deposit of Rs 500. Therefore, the interest on the post office savings account is calculated on the minimum balance between the 10th of every month and the last day of the month.