[curmudgeonII]

I’m old enough to remember that the Post Office used to have a savings account system. [I was one of the patrons.] As I recall, they paid a magnificent 2% interest on their deposits. They stopped offering this service in the mid to late 1940’s.

[Vigilanteman]

Correct. I believe the system was put in place by Grover Cleveland's administration about the turn of the century to co-opt part of the Populist Part agenda.

The 2% return wasn't all that bad in those days. TR and Taft both wanted to strengthen it to add additional banking services and it was very popular in rural areas which were neglected by the commercial banks.

Woodrow Wilson paid homage to the idea, but instead used it to leverage into the Federal Reserve system. It remained active for another generation or so because commercial banks still shunned rural and isolated areas. It became largely obsolete with World War II and the subsequent spread of the automobile which largely ended rural isolation.

As a schoolboy (mid-1960s), it functioned only as a conduit to sell savings stamps (10 cents magenta with the minuteman statue) which could be collected in a book and exchanged for savings bonds. Any other Freepers remember these?