Post Office Savings Account: Interest Rates 2018 & Compete Details

Published Date - 20 March 2018 12:18:02 Updated Date - 20 March 2018 12:21:35

A Post Office Savings Account is similar in many ways to a regular savings account. It is specifically designed to keep your liquid cash in safe place, while earning some interest on it. You can liquidate your money anytime (fully or partially) as per your need. Savings account is a good option for people living in rural and semi rural areas where the reach of banks is somehow limited. Many tax free post office deposits are available, that you can choose to suit your need. And for all of them, you need to have a savings account there to operate your accounts smoothly. Also, it will give you a decent interest rate of 4% which is similar to a bank savings account.

post office small savings investors are being denied their maturity cheques and are instead being asked to open post office savings accounts where the money could be credited. They are asked to open such an account to receive their maturity amount or for receiving intermittent interest income, either quarterly, half-yearly or annually. Before this, investors in small savings schemes like time deposits, Senior Citizens' Savings Scheme (SCSS), and National Savings Certificate (NSC) could deposit their maturity cheques in any bank account. 

Types of Savings Accounts that Can be Started with Post Office:

The Indian postal sector has numerous post office savings policies. The savings schemes include the following among others:

  • Saving Account Schemes (SAS)
  • Recurring Deposit Schemes (RDS)
  • Fixed Deposit Schemes (FDS)
  • Public Provident Fund Schemes (PPF)
  • National Savings Certificate (NSC)
  • Monthly Income Schemes (MIS)


Features Of Post Office Savings Details

A post office savings account is somewhat same as a bank savings account but with a more secure approach as far as the funds of the account holders are concerned. As we all know that post offices in India have a far and wide approach and they have reached even the most rural areas where banks fail to reach. Thus, savings account in post offices is slowly and steadily gaining a more positive momentum from the people. Let us now have a detailed look at all the features of a post office savings account:


  • Account can be opened by cash only.
  • Cheque facility can be taken in an existing account also.
  • Nomination facility is available at the time of opening and also after opening of account.
  • Account can be transferred from one post office to another.
  • One account can be opened in one post office.
  • Account can be opened in the name of minor and a minor of 10 years and above age can open and operate the account.
  • Joint account can be opened by two or three adults.
  • At least one transaction of deposit or withdrawal in three financial years is necessary to keep the account active.
  • Single account can be converted into Joint and Vice Versa.


Post Office Savings Account Interest Rates

The rate of interest of post office savings account is generally decided by the Central Government frequently. The rate of interest is more or less same as the rate of interest offered by banks. This rate is generally 4% and is computed on a monthly basis. Though calculated monthly, it is credited annually. The returns generated by way of interest earnings, if lower than Rs.10, 000 are also tax-free in the hands of the accountholder as per the Income Tax regulations.

Rate of interest

4% per annum

Minimum Amount for Opening

INR 20/-

Interest earned is Tax Free

up to INR 10,000/- per year from financial year 2012-13

Cheque facility available if an account is opened with

INR 500/-

For Cheque facility minimum balance in an account is to be maintained

INR 500/-

Minimum balance to be maintained in a non - Cheque facility account

INR 50/-


Advantages of Opening Post Office Savings Account Online

It is now quite clear as to who all can open a post office savings account. Opening a savings account in post office is very easy as compared to banks and they also offer a more secure and safe approach as far as the funds are concerned. The benefits it offers are way more than the facilities provided by the savings bank in the post offices. Let us now have a look at all the advantages that the account holder enjoys up on opening a savings account with the post office.

  • A minimum balance of only Rs.20 is required on the part of the account holder to open a post office savings account.
  • One can withdraw cash from the account either partly or in full if need arises.
  • An assured return on all the investments of the account holders is offered. Thus, allows a lower exposure to risk to the account holders.
  • Due to lower risk exposure, this account is suitable for both senior citizens as well as people earning regular income.
  • In India, there are posts offices everywhere even in the rural areas. So people residing in rural areas where banks are not established may also have an option to own a savings account through local post offices.
  • Post office savings account does not have any kind of lock-in or maturity tenure. So the procedure to open such an account is free from any trouble and comparatively very easy.
  • Post office savings account offers nomination facility to the account holders that are available both at the time of opening the account and also after opening the account.
  • The account held by the account holders is very flexible in nature. Account can be transferred from one post office to another.
  • The post office also offers the benefits to open joint account if there are two or three adults.
  • An individual account can be converted to a joint account and vice-versa offering additional flexibility.
  • Funds can be deposited and withdrawn electronically in CBS post offices.
  • The returns on all the investments of the account holders, i.e. the interest earned on the accounts are exempt from tax if they are up to Rs.10,000 under the provision of section 10(15) of the Income Tax Act.

Who is eligible to open a Post Office Savings Account

The following individuals are eligible to open a Post Office savings account

  • Adults
  • Minors with a minimum age of ten years
  • A guardian on behalf of a minor
  • A person of unsound mind
  • Two or three adults can open a joint account

However, Group Accounts, Institutional Accounts and other accounts like Security Deposit Accounts & Official Capacity Accounts are not permissible.


First of all, collect all the documents mentioned above.

Provide the nominee details and fill up the form carefully. Also, carry the original identity proof along with you for verification purpose. Finally, get a signature of one witness and complete the formalities.


Features & Benefits of Post Office Saving Account

  • With Reserve Bank of India decontrolling interest rates on savings deposits, the Government of India also escalated the same on post office savings scheme to 4 percent from 3.5 percent.
  • At present post office savings account offers 4 percent rate annually.
  • You must put in at least INR 20 to open an account.
  • You can open an account by cash payment only.
  • You need to keep in a minimum balance of at least INR 50 in a non cheque facility account.
  • You can avail cheque facility as well if your account has a starting deposit of at least INR 500. It goes without saying that this balance has to be maintained every month.
  • You can also request a Cheque facility with a prevailing account.
  • The interest you make from your post office savings is not taxed up to INR 10,000 yearly as of now.
  • It also comes with a nomination feature. You can fill in the details of the nominee(s) at time or after starting your account.
  • Though your account can be transformed from one post office to another, you are allowed to have only one account in your name in one post office.
  • Account can be opened in the name of minor and a minor of 10 years and above age can open and operate the account.
  • You may even start a joint account with another adult or two.
  • To keep your account active, you need to do a minimum of one fund transfer (depositing or withdrawing) in three financial years.
  • Your single savings account can be made into joint one any time you wish to and viz.
  • If the account is opened for a minor, he/ she can apply to get it in their name after turning 18.
  • Cash depositing and withdrawals can be performed through any electronic mode in Core Banking Solution (CBS) Post offices.
  • Inter post office fund transfers can be done between CBS post offices
  • ATM cum Debit Cards can be distributed to Savings Account users (having agreed on a minimum balance on the day of card issuance) of CBS Post offices.


Withdrawing Money from Post Office Savings Account

The process to open a post office savings account is a very easy task. Anyone who wishes to hold a savings account can open it. Similarly, in order to withdraw cash from the account in the time of need, the account holder can easily do it without any trouble. It all depends on the wish and need of the account holder. The account holder can either partially or fully withdraw cash from the account. However, a minimum balance of Rs.50 must be maintained at all times if the accountholder does not wish to close his account. The minimum balance criterion is required to be met to keep the account operative. This is the case where only cash facility is available. But, if the account provides cheque facility, the minimum balance which is to be maintained at all times increases to Rs.500. this level of money must be maintained in the account so that the account remains operative.

Thus, a Post-Office savings Account is a simple and easy savings account alternative for every individual in India, including those in the lower strata of the society.


— For more information of Post Office Savings Account, please visit the official website


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