Penalty for non-maintenance of minimum balance in post office savings account reduced

 Penalty for non-maintenance of minimum balance in post office savings account reduced

The penalty for non-maintenance of the minimum balance in a post office savings account has been reduced by half. As per a notification issued by the Ministry of Finance on April 9, 2021, the account maintenance fee which is levied for non-maintenance of minimum balance in the post office savings account has been reduced to Rs 50 (inclusive of GST) from Rs 100 levied at present.

This was done as part of the amendments to the Post Office Savings Account Scheme 2019 rules.

As per the post office savings account rules, an account holder is required to maintain a minimum balance of Rs 500 currently. If the minimum balance of the post office savings account falls below Rs 500 and the difference is not deposited into the account before the end of the financial year, then an account maintenance fee is levied.

This account maintenance fee was Rs 100, which has now been reduced to Rs 50 (inclusive of GST). Further, if due to deduction of account maintenance fee, the account balance becomes nil, then the post office savings account will automatically be closed. Further, if the minimum balance is not maintained in the post office savings account, then interest will not be paid.

The minimum balance requirement is also applicable on silent accounts as well. Silent accounts are those accounts where no deposits/withdrawals have been made for three continuous financial years.

Interestingly, in March 2020, the State Bank of India (SBI) waived off the minimum balance amount requirement. There is no monthly average balance requirement in the SBI savings account