Basic Savings Account can be opened in Post Office

Now, a beneficiary of the Government welfare scheme can open a basic savings bank account with a post office. The Finance Ministry has notified changes in Post Office Savings Account Scheme, 2019. The notification has also reduced the fee for not maintain the balance in a savings account.

As of now, such accounts can be opened in a scheduled commercial bank or India Post Payment Bank.

According to the notification, the deposit required for opening of such an account will be NIL. There will be no requirement for maintaining minimum balance. The account can be opened by a registered adult member of any Government welfare scheme. The guardian of a minor, whose name has been registered for any Government benefit, can also open an account. The same set of people can operate the account. The notification also mentioned that any Basic Savings Accounts already opened under the Post Office Savings Account Rules,1981 will not be covered under the new notification and will remain operational.

The Basic Savings Account is similar to Basic Saving Bank Deposit Accounts (BSBDA). These are part of the normal banking services but with a few conditions.

A person can have only one basic savings account in a bank or in the post office. The RBI guidelines for the BSBDA states that the deposit of cash can be made at bank branch as well as ATMs/CDMs (Cash Deposit Machine). These accounts can receive money through any electronic channel or by means of deposit /collection of cheques drawn by Central/State Government agencies and departments. There is no limit on the number and value of deposits that can be made in a month. However, withdrawal will be limited to four in a month including that from branch and ATM. The bank has been asked to issue ATM-cum-Debit card.

One prominent basic savings bank account has been Jan Dhan Yojana account which can be opened in any of the bank’s branch or business correspondent’s kiosks or even with India Post Payment Banks. The government claims that with over 42.20 crore accounts and over ₹1.45 lakh crore balance, the scheme has been successful in distributing the welfare funds. These funds are also distributed with the help of Post Office Savings Account which is like normal saving bank account of a bank. Experts feel with provision of Basic Account, the post offices will have a much better product portfolio.

The Post Office Savings Accounts can be opened with a minimum of amount of ₹500. After that, a minimum of ₹10 can be deposited while there is no limit on maximum deposit. In terms of withdrawal, minimum of ₹50 is permitted. Rules say no withdrawal will be permitted which has the effect of reducing the balance to less than ₹500. In case account balance not raised to ₹500 at the end of financial year ₹100 will be deducted as Account Maintenance Fee and if account balance became Nil the account shall stands automatically closed.

Now, the Finance Ministry has halved the Account Maintenance Fee to ₹50 (inclusive of GST). Officials feel that this will give some relief to small account holders.

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