Postal Savings System

An Act of Congress of June 25, 1910, established the Postal Savings System in designated Post Offices, effective January 1, 1911. The legislation aimed to get money out of hiding, attract the savings of immigrants accustomed to saving at Post Offices in their native countries, provide safe depositories for people who had lost confidence in banks, and furnish more convenient depositories for working people.

The system paid two percent interest per year. Initially, the minimum deposit was $1, and the balance in an account could not exceed $500, excluding interest.

Deposits were slow at first, but by 1929, $153 million was on deposit. Savings spurted to $1.2 billion during the 1930s and jumped again during World War II, peaking in 1947 at almost $3.4 billion.

After the war, banks raised their interest rates and began offering the same governmental guarantee as the Postal Savings System. In addition, United States savings bonds gave higher interest rates. Deposits in the Postal Savings System declined, dropping to $416 million by 1964.

On April 27, 1966, the Post Office Department stopped accepting deposits to existing accounts, refused to open new accounts, and cut off interest payments as the annual anniversary date of existing accounts came up. When the system ended officially July 1, 1967, about $50 million in the unclaimed deposits of more than 600,000 depositors was turned over to the U.S. Treasury Department to be held in trust indefinitely.

An Act of August 13, 1971, authorized the Treasury to turn over the money on deposit to various states and jurisdictions, each sharing proportionately based on its own deposits. Some money was kept for future claims, but under the Postal Savings System Statute of Limitations Act of July 13, 1984 (Public Law 98-359), no claims could be brought more than one year after enactment. Thus, no claims made after July 13, 1985, have been honored.

The above Statute of Limitations applies only to certificates. Postal savings stamps and postal savings bonds can be redeemed by sending them to the Bureau of the Public Debt, Post Office Box 426, Parkersburg, WV 26106-0426.