Both India Post Payments Bank (IPPB) and Post Office Savings Account (POSA) play an important role to increase the access to financial services in India. But what is the difference between these two accounts and which account is better for you? In this article, we will compare between IPPB and Posa so that you can make the right decision.
Brief introduction to IPPB and Posa
The IPPB was launched in 2018, which aims to provide banking services to rural areas. It is a payment bank that provides limited financial services.
Posa, ie Post Office Savings Account, is a traditional savings account operated by the Indian Postal Department, providing saving facilities to people for decades.
The table below has a brief comparison of IPPB and Posa:
| Speciality | IPPB | Posa |
| Minimum amount of account opening | Zero balance | ₹ 20 (₹ 500 for check facility) |
| Interest rate | 2.75% per year | 4% per year |
| Maximum balance limit | ₹ 1,00,000 | No limit |
| Doorstep banking service | Available (at additional fees) | Not available |
| Account type | Three types: regular, digital, basic | Uniform |
| Linking facility | Can be linked with posa | Can be linked with IPPB |
IPPB: 1,00,000 Limited Account
Main characteristics:
- Zero Balance Account: Minimum balance is not required to open an account in IPPB.
- Interest Rate: It gives interest of 2.75% per year, which is less than Posa.
- Maximum balance limit: Maximum can be kept in IPPB account up to ₹ 1,00,000 only. More than this, the amount is transferred to the automatically linked POSA account.
- Doorstep Banking: IPPB provides doorstep banking service to customers. This feature is particularly useful for rural areas.
- Account types: IPPB provides three types of accounts:
- Regular savings account
- Digital account
- Basic Savings Account
Benefit:
- Efforts to increase the reach of banking services in rural areas.
- Fund management facility through mobile app.
- Sweep-in/Sweep-out.
Limits:
- The interest rate is low.
- The maximum limit of ₹ 1,00,000 may be a hindrance to some customers.
Posa: Account with unlimited savings
Main characteristics:
- Account opening amount: A minimum of ₹ 20 is required for opening an account in POSA or ₹ 500 for check facility.
- Interest Rate: It provides interest of 4% per year.
- No maximum limit: You can deposit unlimited amount in POSA account.
- Simple process: This account can be easily opened in any post office.
Benefit:
- High interest rate.
- No maximum balance limit.
- The account can be easily transferred from one post office to another.
Limits:
- Lack of modern facilities like doorstep banking.
- Mandatory to maintain minimum balance (₹ 50 or ₹ 500).
Which option is better?
Depending on your priority:
- If you need doorstep banking and your daily balance is limited to ₹ 1,00,000, then IPPB may be a better option for you.
- Posa will be suitable if you want to earn more interest and deposit a large amount.
Benefits of linking IPPB and Posa
By linking IPPB and Posa, you can take advantage of both accounts. For example:
- When the balance of the IPPB account exceeds ₹ 1,00,000, the additional amount is automatically transferred to the POSA account.
- This gives you the benefit of high interest rate of Posa.
Linking process:
- The customer has to present his active Posa passbook.
- This process can be completed at doorstep service or IPPB access point.
Conclusion: Which account to choose?
Choose IPPB if:
- You need a zero balance account.
- You want a doorstep banking service.
- Your balance is usually up to ₹ 1,00,000.
Choose posa if:
- You want a high interest rate.
- You have a plan to deposit a large amount.
- You need a traditional savings account.
Disclaimer:
This article is written only for the purpose of providing information. Both IPPB and Posa are part of government schemes and are real. Choose the correct option according to your financial status and requirements.
