Postal savings system

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Postal savings systems were offered by many nations' post offices to provide depositors who did not have access to banks a safe, convenient method to save money and to promote saving among the poor.

The first nation to offer such an arrangement was Great Britain in 1861. It was vigorously supported by Sir Rowland Hill, who successfully advocated the penny post, and William 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 system was limited to deposits of £30 a year with a maximum balance of £150. Interest was paid at the rate of two and one-half percent per year on whole pounds in the account. Later the limits were raised to a maximum of £500 a year in deposits and no limit on the total. Within five years of the establishment of the system 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 on deposit. The British system was spun off into an independent bank, Girobank.

• The United States began a similar system in 1911 under the Act of June 25, 1910 (36 Stat. 814). It was abolished by the Act of March 28, 1966 (80 Stat. 92).

Many other countries adopted such systems, but they have generally been abolished or spun off like Girobank.

• However, in Japan, the post office is one of the nation's leading bankers holding trillions of yen from conservative, risk averse citizens. The government has been criticized for using these funds to engage in uneconomical infrastructure projects—what in America would be called pork barrel spending.
• France's La Poste does not offer deposit services, but does offer some fee-free financial services in direct competition with privately owned banks, such as monetary withdrawals from private bank accounts and money changing. La Poste is the second largest employer in France, yet its hours of operation are often criticized as irregular and inconvenient.
• Germany has, like Japan, a postal banking system: Deutsche Postbank is a subsidiary of Deutsche Post. Postal banking services are available at all branches.
• Austria had a similar system, where the Österreichische Post used to own the Österreichische Postsparkasse (P.S.K.). This financial institute was bought and merged by the BAWAG in 2005.
• Brazil has instituted a similar 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 Austrian Postal Savings Bank (P.S.K.) in Vienna