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United States Postal Savings System

The United States Postal Savings System was a postal savings system operated by the United States Postal Service from January 1, 1911 until July 1, 1967. The system paid depositors 2 percent annual interest. Depositors in the system were initially limited to hold a balance of $500, but this was raised to $1,000 in 1916 and to $2,500 in 1918. At its peak in 1947, the system held almost $3.4 billion in deposits. The system originally had a natural advantage over deposit-taking private banks because the deposits were always backed by "the full faith and credit of the United States Government." However, because the Federal Deposit Insurance Corporation gave the same guarantee to depositors in private banks, the Postal Savings System lost its natural advantage in trust.