Postal savings systems a form of banking offered in conjunction with post office services, often in rural or isolated areas that do not have traditional banking. Postal saving systems provide depositors who do not have access to banks a safe and convenient method to save money.
History
In 1861, Great Britain became the first nation to offer such an arrangement. It was supported by Sir Rowland Hill, who successfully advocated the penny post, and William Ewart Gladstone, then Chancellor of the Exchequer, who saw it as a cheap way to finance the public debt. At the time, banks were mainly in the cities and largely catered to wealthy customers. Rural citizens and the poor had no choice but to keep their funds at home or on their persons.
The original Post Office Savings Bank was limited to deposits of £30 per year with a maximum balance of £150. Interest was paid at the rate of 2.5 percent per annum on whole pounds in the account. Later, the limits were raised to a maximum of £500 per year in deposits with no limit on the total amount. Within five years of the system's establishment, there were over 600,000 accounts and £8.2 million on deposit. By 1927, there were twelve million accounts—one in four Britons—with £283 million (£ million today) on deposit.
The British system first offered only savings accounts. In 1880, it also became a retail outlet for government bonds, and in 1916 introduced war savings certificates, which were renamed National Savings Certificates in 1920. In 1956, it launched a lottery bond, the Premium Bond, which became its most popular savings certificate. Post Office Savings Bank became National Savings Bank in 1969, later renamed National Savings and Investments (NS&I), an agency of HM Treasury. While continuing to offer National Savings services, the (then) General Post Office, created the National Giro in 1968 (privatized as Girobank and acquired by Alliance & Leicester in 1989).
Many other countries adopted such systems soon afterwards. Japan established a postal savings system in 1875 and the Dutch government started a systems in 1881 under the name Rijkspostspaarbank (national postal savings bank); this was followed by many other countries over the next 50 years. The later part of the 20th century saw a reversal where these systems were abolished or privatized.
By country
Austria
In Austria, the Österreichische Post used to own the Österreichische Postsparkasse (P.S.K.). This financial institute was bought and merged by the BAWAG in 2005. In April 2020, Österreichische Post launched a new postal bank, .
Brazil Brazil instituted a postal banking system in 2002, where the national postal service (ECT) formed a partnership with the largest private bank in the country (Bradesco) to provide financial services at post offices. The current partnership is with Bank of Brazil.
Today the bank is in a semi-defunct state since 2019, after a decree from the government shut down the branch.
Bulgaria In Bulgaria, the postal banking system was a subsidiary of Bulgarian Posts until 1991, when Bulgarian Postbank was created. In the years that followed, Bulgarian Postbank was privatized and the relationship between post offices and bank offices became weaker. Postal banking services ceased to be available in post offices in 2011.
Canada Canada Post offered banking services via its Post Office Savings Bank, created by the Post Office Act in April 1868, less than a year following the nation's confederation. A century later, the Post Office Savings Bank was shut down in 1968–69. Since at least the early 2010s, postal banking has been discussed and studied periodically, with postal unions backing the idea. In October 2022, Canada Post dipped its toe into the possibility of rolling out postal banking services by offering small personal loans between $1,000-$30,000 in partnership with TD Bank, but no chequing or savings accounts. Less than a month later, in November 2022, the loan program discontinued any new applications.
In 2024, Canada Post confirmed it has partnered with KOHO Financial to bring back postal banking by offering chequing and savings accounts; with a range of different accounts, including a basic no-fee account as well as accounts with fees. The date of public nationwide access to these banking services is planned for 2025.
Many rural communities, remote indigenous communities, and even some inner-city neighbourhoods, are lacking a local bank or credit union, many with either no reliable access to the internet or no affordable (or free public wifi) for internet banking. These financially underserved communities are left without the ability to have a locally accessible bank account, having a high risk of theft or misappropriation of funds if large amounts of cash are stored at home or else resort to paying costly fees using Canada Post's prepaid reloadable Visa card, inability to get a bank loan for a business, inability to build credit, great difficulty running a business, inability to deposit or cash cheques, or inability to cash cheques for more than a limited amount at retailers (if there's any retailers cashing cheques in their community) along with cheque cashing fees, or cash larger cheques at extremely high-fee payday lenders.
The number of bank branches in Canada have been steadily on the decline, from 6,350 in 2014 to 5,783 in 2020; as have credit union branches, from 3,603 in 2002 to 2,336 in 2022. Of the 2,620 small towns and rural communities with post offices in Canada, 1,178 (45%) did not have any bank branches; in over 700 indigenous communities in Canada, over 90% did not have any bank or credit union branches. As of 2018, there are more post offices (6,200) in Canada than bank branches. "Banking deserts" occur in cities also, in Ottawa's downtown Bank Street, there are more high-fees payday lenders than banks.
Despite the steady increase of online banking among Canadians, in 2022, the amount of cash in circulation was 25% higher than pre-pandemic levels. In 2020, 40% of transactions under $15 were conducted with cash. The ability to have a chequing account and withdrawal cash in-person from a local branch is vital for teens, low-income adults, adults trying to get out of debt, and vulnerable Canadians such as the disabled (those able to live without formal trusteeship), elderly and technology-illiterate, and those fleeing domestic abuse; as handling cash gives a more concrete understanding of where money is going than making purchases with a card, as well as less fees taking from their already small funds since purchases with cash have no transaction fees, overdraft fees, non-sufficient funds fees, or card loading fees.
China
In the People's Republic of China, the Postal Savings Bank of China () was split from China Post in 2007 and established as a state-owned limited company. It continues to provide banking services at post offices and, at the same time, some separated branches.
Finland In Finland, Postisäästöpankki ("Post Savings Bank") was founded in 1887. In 1970 its name was shortened to Postipankki ("Post Bank"). In 1998 it was changed to a commercial bank named Leonia Bank. Later, it was merged with an insurance company to form Sampo Group, and the bank was renamed Sampo Bank. It had a few own offices, but also post offices performed its banking operations until 2000. In 2007, Sampo Bank was sold to the Danish Danske Bank.
France France's postal service, La Poste, offers financial services through the affiliated bank known as La Banque postale.
Germany Deutsche Postbank has a postal banking system. Deutsche Postbank was a subsidiary of Deutsche Post until 2008, when 30% of Deutsche Post's shares were sold to Deutsche Bank. Postal banking services are still available at all branches of Deutsche Post and Deutsche Postbank.
Greece Greek Postal Savings Bank provided banking services from post offices until 2013 when it was replaced by New TT Hellenic Postbank a subsidiary of Eurobank Group.
Hungary
The postal savings bank of Hungary was established on 1 February 1886 by order of Lex IX of 1885. This act initially only authorized savings accounts, but was later expanded by Law XXXIV of 1889, which authorized "checks and clearing" starting on 1 January 1890. In 1919 the Postal Savings Bank notes were issued under the decree of the Revolutionary Governing Council of the Hungarian Soviet Republic by the Magyar Postatakarékpénztár (Hungarian Postal Savings Bank).
India
India Post has provided an avenue for managing savings to the people living in rural or the urban poor, underserved by the formal banking system, since 1882 when Post Office Savings Bank was established.
Over time, the scope of financial services provided by India Post grew to include other National Savings Schemes promoted by Government of India. In 2018, India Post Payments Bank (IPPB) was launched as a regulated bank to provide a full set of banking services, as specialised division of India Post. As of January 2022, the bank was serving around 50 million customers.
Indonesia Postal savings in Indonesia began with the establishment of the Netherlands Indian Post Office Savings Bank () in 1897. During the Japanese occupation of the Dutch East Indies, it was replaced by the and savings were encouraged by the military administration to support the Greater East Asia War. The Savings Office became the Post Office Savings Bank again () after independence, before renamed into the current State Savings Bank, or Bank Tabungan Negara (BTN) in 1963. Between 1963 and 1968, it became the Fifth Unit of Bank Negara Indonesia during the single-bank system, made to support the guided democracy.
Currently, BTN offers a savings plan that allows its users to deposit in post offices.
Ireland In Ireland, An Post provide a Post Office Savings Bank Deposit Account. It provides an interest rate of 0.15% which is added to the account at the end of the year. Customers are provided with a physical deposit book and can deposit and withdraw from the account using the deposit book at any Post Office Branch. This service is run on behalf of the National Treasury Management Agency with other "Ireland State Saving" schemes offered by the Irish Government, including Prize Bond.
An Post also provide saving stamps for children, from the 1980s stamps cost 50p/50c, each stamp was place in a card. There were 10 places on each side of the card, you could exchange the stamps for their value at any post office. Prior to this stamps cost 10p and allowed children to save just IR£1.
An Post also provide separate commercial banking services. Between 2006 and 2010 it ran Postbank, a joint venture with Fortis Bank Belgium. It now provides banking service under the brand An Post Money.
Israel Israel's postal service Israel Postal Company offers utility payment, savings and checking accounts, as well as foreign currency exchange services from all post offices.
Italy In Italy, the Postal savings system is run by Poste italiane, the Italian postal service company. Poste italiane run this service along with Cassa Depositi e Prestiti.
Japan Japan Post Bank, part of the post office was the world's largest savings bank with 198 trillion yen (US$1.7 trillion) of deposits as of 2006, much from conservative, risk-averse citizens. The state-owned Japan Post Bank business unit of Japan Post was formed in 2007, as part of a ten-year privatization programme, intended to achieve fully private ownership of the postal system by 2017.
Kazakhstan In Kazakhstan, national postal operator, Kazpost, has a banking license and offers banking services in all its branches across the country.
Kenya Kenya Post Office Savings Bank (KPOSB/Postbank)
Netherlands