India Post Payments Bank Would Levy Rs 150 Plus GST to Close Savings Account

The India Post Payments Bank (IPPB) has implemented a Rs 150 + GST penalty for closing a digital savings account, which will take effect on March 5, 2022. Only if the Digital Savings account is cancelled after a year due to a lack of KYC updation will the charge be applied. Otherwise, there is no price for closing an account.

The India Post Payments Bank is a subsidiary of Indian Post, which is controlled by the Postal Department.

According to the India Post Payments Bank’s website: “This is to inform all parties that, as of March 5, 2022, India Post Payments Bank would impose a fee of Rs. 150 + GST to close a Digital Savings Bank Account. The fees will only apply if the Digital Savings Bank (DGSB) account is cancelled at the conclusion of the one-year period owing to a lack of KYC updates.”

“To obtain unrestricted banking services, kindly upgrade your Digital Savings Account to Regular Savings Account within 1 year by visiting any IPPB access point,” the India Post Payments Bank website says.

Digital Savings Bank Account

Anyone over the age of 18 with an Aadhaar and a PAN card can open this account. The account can be started with no balance and there is no requirement to maintain a monthly average amount. Beginning February 1st, 2022, the account’s interest rate will be 2.25 percent.

Key points to note about Digital Savings Account

• Within 12 months, the account holder should complete the KYC procedures.
• The Digital Savings Account will be upgraded to a Regular Savings Account after the KYC formalities are completed. These formalities can be completed at any of the access location (Post Office) or with the assistance of the GDS/Postman.
• The account allows for a maximum annual cumulative deposit of Rs. 2 lakh.
• If the KYC is not completed within 12 months of account opening, the account will be closed.
• After completing KYC within 12 months, the Digital Savings account can be linked to a Post Office Savings Account (POSA). As per the notice issued by the IPPB, “The DGSB account holder can convert the account to SBREG (Regular Savings Bank Account) before one year by doing re-KYC and enjoy many more features applicable to SBREG accounts.”

Cash withdrawals, which are free up to 4 transactions per month for a basic savings account, will be taxed at 0.50 percent of the value, subject to a minimum of Rs 25 each transaction, if the free limit is exceeded, according to an IPBB notice dated November 3, 2021. (GST/CESS will be applied at the applicable rates and is not included in the charges.)

According to the IPPB website, the interest rate for savings accounts with balances up to Rs 1 lakh would be 2.25 percent from February 1, 2022, and 2.50 percent for balances above Rs 1 lakh but less than Rs 2 lakh.

Source: The Economic Times