Savings using Post Offices in India
I was traveling on a bus to visit a friend. I had made the mistake of sitting next to this talkative man. He spoke about anything and everything, especially his personal stories and opinions.
At one point he said, “I want to tell you one more thing, but I don’t know if it will be worth telling you. You don’t save, do you?”
I was quite taken aback by what he said and, it hurt a little bit. And why do some people openly judge others? I haven’t even earned enough in life to save.
So I said, “Yes, I have some in the bank and some in investments”
To which he replied, “That's not savings. The way to save money is by putting it in a post office. That is the only place where they don’t levy taxes.”
As for taxes, I don’t think it's applicable anymore with the new tax scheme. But he reminded me of a savings method that is quite forgotten.
Post offices started with only the delivery of letters and couriers, but soon started to provide banking services. They started the savings bank in 1882, to reach people in rural and semi-urban areas. It was very famous, especially because of its simplicity, and low money requirement to start investing. Middle class being the major part of India’s population, they preferred using the post offices for savings and investment. Even minors were able to open an account with a parent. One of my school teachers had suggested this idea to my mother, and I personally had an account back then. We had paid as low as 150 rs per month and reaped enough sum after maturity to buy 1.5 sovereigns of gold. It is also famous because of its low-risk nature since it is backed by the government.
It is pretty similar to a bank savings account, but much more safe, and in some schemes, you receive attractive interest rates. It is very accessible, especially for people from rural areas. They also provide an ATM card, just like other banks.
It is a great way for small investors to start saving, especially beneficial for minors who will learn the importance and happiness of saving and investing. It is great as one of the baskets for savings and investment, especially if you are someone who has a low income. Do suggest this to people who cannot read and write so that this information reaches them.
If you are interested in learning more about the types of saving schemes in the post office and the details about them, click here.
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