Post Office Savings Schemes are very popular in small towns though these schemes have lost relevance in big cities. I remember “National Savings Certificate” popularly known as NSC was most preferred investment avenue for my parent’s generation. During those days not many financial instruments were available for investment cum Tax Savings. Secondly, the biggest plus point for Post office Savings Schemes is trust factor because of Govt of India backing.
Despite have some of the Best Financial Products in the portfolio, it is not recommended to invest in Post Office Savings Schemes…Let’s find out why
1. Post Office Savings Schemes are linked to Place of Investment:
Concept is similar to Home Branch concept of Banks. Assume that you invested in one of Post Office Savings Schemes say Monthly Recurring Deposit in Worli Post office. Now, you can operate your account only through Worli Post Office. In case you shift from Worli to Chembur then you need to get your account transferred from Worli to Chembur Post Office. It’s a manual activity and might take months or in some cases years. Reason every Post Office has deposit targets and it is not in the interest of Post Office to transfer deposit account. In case, you shift from Mumbai to any other city then it will be nightmare to shift your Post Office Savings Schemes from Mumbai to another city.
2. Post Office Savings Schemes are like Currency Notes:
Though Post Office Savings Schemes like NSC or Kisan Vikas Patra carry name of the investor but in case Post Office Savings Schemes certificate is lost, stolen or damaged then investor need to run from pillar to post to claim his/her investment that too without much success. If your investment documents are stolen specially NSC or Kisan Vikas Patra then anyone with little brains can withdraw your investment easily.
3. Post Office Savings Schemes are not digitized:
Unlike other investment avenues like Mutual Funds, Equity, Gold etc it is not possible to operate your Post Office Savings Schemes account online i.e. you cannot track your account or invest online. You always need to keep your passbook updated all the time by standing in post office queues for hours. In this internet age no one prefer Stone Age mode of operation.
4. Unfriendly Post office Staff:
No offence to anyone but in my opinion, Post Office staff is very unfriendly. They treat their customers as if they are doing some big favor to customer. Despite being PSU State Bank of India and Bank of Baroda has done a commendable job in this regard. Post Office staff should be trained to be more customer friendly and professional in their approach.
5. Post Office Agents Rule the Roost:
If you have ever visited Post Office then you can co-relate what i am trying to convey. When i visited one of Post Office in Mumbai to open RD account, 5-6 agents Gheraoed me. Somehow I reached RD counter and to my surprise Post Office employee suggested me to open the RD account through Post Office agent. Post Office agents receive commission for all Post Office Savings Schemes opened through them. Food for thought is why Post Office employee is suggesting to open a deposit account though agent, We really need strong LokPal Bill.
Recently Department of Post applied for Banking License and i strongly feel that they should get Banking License because of widest reach and employee strength but before that mindset change is required. Post Office Savings Schemes are not only for a “Poor Man” but for every resident of India.