Difference Between Bank and Post Office

Bank vs Post Office

Post office has traditionally been a place used by people for purposes other than for which they go to a bank. While post offices have been there to provide mailing services and handle people’s and governmental mails, letters and envelopes along with parcels, banks have been used for banking services such as deposit and withdrawal of money apart from loans and mortgages. Though there are many overlapping functions, because of post offices today performing many financial functions that were once a prerogative of banks only, there are many glaring differences between a bank and a post office.


The primary purpose of a bank is to provide financial services to its customers. If you are running a small business, you know how important the current account you are maintaining with the bank is for your business. You can not only make and receive payments in your bank account, you can also avail facilities of over draft, for which bank requires payment of interest on your part. Banks also issue debit and credit cards linked with your account, which you can use everywhere to make purchases. With the facility on net banking, a person can make payments sitting in the comfort of his home and also know his balance. If you need to send payment through your bank to another person or company, electronic transfer of funds is a very easy option these days.

Post Offices

On the other hand, post offices have traditionally been used to make available mailing services to common people. Though, with modern communication gadgets like smartphones one can talk with someone sitting at a distance, as if he was sitting next to you, there is always official communication such as letters, documents etc that need to be sent to far off destinations using mailing services of a post office. For making payments to vendors in other cities for their products, we need to send money in advance, which is not possible to be sent in envelopes. This is where the facility provided by post offices in the name of money orders and postal orders comes in handy. For those not having a bank account, it is easier to send the amount of money in the form of postal order to institutes as exam fee or any other similar purpose.

However, realizing the problem of taking banking facilities to many rural areas and remote areas that are almost inaccessible, government has initiated many banking services from post offices such as opening accounts in post offices. These accounts are just like accounts in banks, and in most instances, it has been found that people get higher rate of interest on their deposits in post office accounts than in bank accounts. This is because post offices have lower over head expenses than banks. Post offices also have fixed deposit schemes and recurring deposit schemes that provide a better rate of interest than many banks, which is why post offices are today becoming very popular. Government sells many developmental schemes certificates in post offices that offer income tax rebate to people and also perform like fixed deposits.

What is the difference between Bank and Post Office?

• There is a common perception that banks provide financial services, while post offices provide mailing services only.

• However, many banking facilities are today being provided by post offices such as opening of accounts and saving scheme with better rates of interest than banks.

• There are many income tax saving schemes offered by post offices, which makes their products very attractive for people.