Postal Bank to save customers of transaction fees, minimum balance woes

Bank customers fleeced by banks with sundry charges on anything from cash withdrawals to balance enquiry has a smart option now, the Postal Bank. With nationwide presence and a network of ATMs being rolled out by India Post, postal savings account holders can withdraw money without any ''hidden charges''.

With a network of 1.5 lakh post offices serving customers across the country, the Postal Bank of the Department of Posts promises its customers no transaction fee on transactions and freedom from the minimum cash balance requirement that banks across the county insist on.

India Post which has, till December 2016, migrated 23,091 post offices to core banking services (CBS), has now opened 986 ATMs across the country, to provide cost-free transactions to its savings account holders.

Postal Bank accounts would only need a minimum Rs50 in the account, while all transactions – both cash and digital – will come cost-free. To open an account a customer would need only Rs20 and need to keep only a Rs50 as minimum balance.

Private banks insist on a minimum balance anywhere between Rs5,000 to Rs1,50,000 and levy charges on almost any transaction including cash transactions, with public sector banks having now joined the bandwagon.

For accounts with cheque facility, the Postal Bank wants a minimum balance and initial amount of Rs500, but still way cheaper than all other banks. Postal savings accounts offer a rate of interest of 4 per cent on such savings, promises no yearly charges / no hidden fees.

The Postal Bank, with a branch network of about 1.5 lakh post offices - about 1.3 lakh in villages and about 25,000 in cities and towns - the department has much bigger network than even the State Bank group combined (about 25,000).

The postal department already has years of experience in maintaining savings accounts. Total outstanding balance under all National Savings Schemes and Savings Certificates in post office is over Rs6,39,254 crore as on 31 March 2016. Out of this, amount garnered under the savings accounts is about Rs55,082 crore and Rs76,181 crore under recurring deposit scheme.

With ATMs becoming interoperable, India Post customers having debit card can transact on other bank ATMs and similarly other bank customers can transact on Postal Bank ATMs. The CBS spread means you can transact your postal banking account in any of these branches covered under CBS, just like a normal bank, but without the transaction charges.