Post Office Savings Account Interest Rate

Besides postal services, the Post offices in India also offer an array of government social security schemes. The PO Savings Bank Account is their flagship product that helps save money and build corpus for retirement through compounding over a specific period. The service has a vast customer base of over 1.55 Lac that allows people to use their money efficiently.

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Post Office Savings Account Features

The functioning of Post Office savings account is similar to the savings account offered by the banks. After the announcement of total Post Office integration by Finance Minister, all the services have gone digital to offer services even at remote corners of the country. 

Here are some essential features the Post Office savings account offers: 

  • All individuals can hold one account under their name at any post office across the country. 

  • The accountholder operates singly or jointly, depending on its nature.

  • A joint account is confined to two account holders only. Upon death, it automatically converts in the survivor’s name.  

  • Nomination is mandatory while opening the account.

  • The minimum balance in the account is Rs.500, and you cannot withdraw for balances below the threshold.

  • The Post Office Savings Account provides electronic facilities like net banking, mobile banking, ATMs, and online transfer between two post office accounts. 

Post Office Savings Account Interest Rate

The Ministry of Finance notifies the Post Office Savings Account interest rate. The current rate is 4% per annum, reckoning the lowest balance between the 10th and last day of a month for interest calculation. However, you do not earn any interest if the minimum balance is below the Rs 500 threshold. 

Furthermore, the accrued interest gets credited at the end of each financial year. Finally, the interest applies up to the month previous to account closure. 

Let us look at the interest rates applicable to the other Post Office schemes. 

S. No. Scheme Name  Interest Rate  Compounding Frequency 
1 1 Year Time  Deposit  5.5% Quarterly
2 2 Year Time  Deposit  5.5% Quarterly
3 3 Year Time  Deposit  5.5% Quarterly
4 5 Year Time  Deposit  6.7% Quarterly
5 5 Year Recurring  Deposit  5.8% Quarterly
6 Senior Citizens Savings Scheme  7.4% Quarterly and disbursed 
7 Monthly Income Scheme  6.6% Monthly and disbursed 
8 National Savings Certificate (VIII)  6.8% Annually
9 Public Provident Fund 7.1% Annually
10 Kisan Vikas Patra  6.9% Annually
11 Sukanya Samriddhi Account  7.6% Annually

Post Office Savings Account Eligibility

Open the account in any post office with the following eligibility criteria:

  • An adult operating singly or jointly with another adult individual.

  • Minor account under a guardian or self-operated if 10 years and above.

  • Similarly, a person with unsound minds under a guardian.

  • Under no circumstances can a person hold more than one account regardless of the status.

  • While the minimum opening deposit is Rs 500, there is no upper limit.

Post Office Savings Account Service Charges

It is essential to be conversant with the service charges to comply with them from time to time after opening the savings account. 

Facility/ Event  Charge/ Fee (Rs)
Savings Account Cheque Book  Up to 10 leaves in Financial Year: Free Additional: Rs 2 per leaf
Duplicate Cheque Book Issue  Rs 50
Cheque Dishonor  Rs 100 per occasion
Deposit Receipt Issue  Rs 20 per receipt
Account Statement  Rs 20 per statement 
Account Transfer  Rs 100
Account Pledging  Rs 100
Nomination Change or Cancellation Rs 50
Passbook replacing Mutilated Certificate Rs 10 per certificate
Account Maintenance  Rs 50
The above service charges/ fees are subject to the application of GST.

Post Office Savings Account Deposit and Withdrawal Rules

You must be aware of the Post Office Savings Account transactions rules: 

  • While the deposits are a minimum of Rs 10, the minimum amount to withdraw is Rs 50. In addition, all transactions must be in whole rupees only. 

  • You must present the passbook if the withdrawal is without a cheque

  • You cannot transact in the silent/ dormant account until you revive it, complying with the rules. 

  • You must deposit the shortfall amount if the balance is below the minimum prescribed Rs 500. Else you pay a maintenance fee from the account. 

  • On the other hand, your account stands automatically closed if the balance is nil due to recoveries. 

Post Office Savings Account Benefits

The Post Office Savings account compares with the best today in terms of facilities after completely going digital. Accordingly, you benefit in the following ways:

  • Cheque Facility: The account provides a CTS cheque facility for clearing services across the country. 

  • ATM/ Debit Card: Account holders can apply for ATM/ Debit Cards, subject to compliance with the minimum balance norms since post offices are on the CBS platform. 

  • Minor Account: The account converts into a standard account once the minor turns 18. However, submit KYC documents and an account opening form afresh.

  • Joint Holdings: Though you can open a joint account with another individual, you cannot convert the account into a single one and vice versa. 

  • Account Dormancy: The account is dormant in the absence of transactions over three consecutive years. However, submit an application form with supporting KYC documents to activate.  

  • Additional Facilities: Apart from enjoying all the electronic powered facilities, you can additionally request the following:

    • Aadhaar Seeding

    • APY (Atal Pension Yojana)

    • PMSBY (Pradhan Mantri Suraksha Bima Yojana) 

    • PMJJY (Pradhan Mantri Jeevan Jyoti Yojana)

  • Tax Exemptions: Interest earned in a financial year up to Rs 10,000 is tax-exempt under Section 80TTA of the IT Act, 1961.

In Conclusion

With its savings account services, Post Offices have been able to reach the remotest corners while offering corpus building. Besides, the post office has embraced CBS system for smooth operations.

Post offices not only offer these services or schemes but also has decent interest rate that helps people gain passive income or wealth accumulation. You can also find other wealth accumulation schemes at your nearest post office.

Always remember to ask a professional for service or scheme details before making the final investment.


  • Is the portability available to the Post Office Savings Account?

    Yes, you can port the account to a Post Office in your vicinity on your relocation or if the services in the parent office are dissatisfactory.
  • Is the Post Office Savings account enabled for receiving Direct Benefit Transfer (DBT)?

    Yes, after Aadhaar seeding, you can link your Post Office Savings Account for DBT. 
  • What happens if your interest income in the Post Office Savings Account Exceeds Rs 10,000 in a financial year?

    The amount over Rs.10000 is added to your gross earnings under the other income category and taxed at the applicable tax slab rate. 
  • Can you deposit Rs.10 Lac in your Post Office Savings Account?

    Yes, you can deposit as there is no amount cap. But you must disclose the fund source according to the Anti Money Laundering Act, 2002.
  • What is the fate of a joint PO Savings Account if one account holder passes away and the survivor has a single account in his name?

    The account title changes to the survivor’s sole name. However, the account will be closed if the survivor already holds one.

Past 5 Year annualised returns as on 01-05-2024

^The tax benefits under Section 80C allow a deduction of up to ₹1.5 lakhs from the taxable income per year and 10(10D) tax benefits are for investments made up to ₹2.5 Lakhs/ year for policies bought after 1 Feb 2021. Tax benefits and savings are subject to changes in tax laws.

*All savings are provided by the insurer as per the IRDAI approved insurance plan.

Tax benefit is subject to changes in tax laws. Standard T&C Apply
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^^The information relating to mutual funds presented in this article is for educational purpose only and is not meant for sale. Investment is subject to market risks and the risk is borne by the investor. Please consult your financial advisor before planning your investments.

#The lumpsum benefit is calculated if policyholder invested ₹10000 monthly for 10 years in the fund with a policy term of 20 years. This Point To Point past performance data of last 10 years has been used to illustrate a scenario for the customers benefit. It is assumed that the past 10 years returns would have also been delivered in last 20 years. This is not guaranteed and not in anyway indicative of what the customer may actually get 20 years from now. The investment is subject to market risk and the risk is borne by the policyholder.

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