Post Office Savings Account

A Post Office Savings Account is one of the most popular and accessible savings accounts in India. The minimum opening amount as well as maximum balance that can be retained is Rs.500. Currently, the interest rate being offered for this account is 4.00% p.a. It can also be opened by a minor above the age of 10 in their own name. Only one account can be opened as a single account by the individual. There is no limit on the maximum amount that can be deposited in a post office savings account. It is also eligible for tax exemption for interest of up to Rs.10,000 earned in a financial year (for all savings accounts combined) under the Income Tax Act 80TTA.

Post Office Savings Account is similar in many ways to a regular savings account. It is considered to be a highly secure instrument to deposit funds into and offers the option of full or partial liquidation of funds at very short notice in case the need arises. These accounts generally offer a guaranteed return on investment and are ideal for senior citizens and people who are looking to earn a regular income without exposure to risk.

For more information, Check out related articles PPF Account Post Office, Sukanya Samriddhi Yojana Post Office, NSC Post Office Saving Scheme & NSC Post Office Interest Rate

In order to open a Post Office Savings Account, you need to be an Indian and an adult. A minor will have to be a minimum of 10 years to be eligible for opening a Post Office Savings Account. For opening a joint post office savings account, 2 or 3 individuals are required.

Details of post office savings accounts
Minimum initial deposit Rs.20
Minimum balance for account without cheque book Rs.50
Minimum balance or initial deposit for account with cheque book Rs.500
Interest rate 4% p.a.
Tax Free Interest Up to Rs.10,000 p.a.

How to Open Post Office Savings Account

follow these simple steps to open a post office savings account.

Post Office Savings Account
  • Visit your nearest post office or the official website of India Post and get the application form.
  • Fill the form with appropriate information
  • Furnish the relevant documents, and a passport size photograph.
  • Pay a deposit amount, which cannot be lower than Rs.20.
  • If you want to get a post office savings account without a cheque book, you will need to pay a deposit amount of at least Rs.50.

Single account holders can deposit a maximum of Rs one lakh while joint account holders can deposit a maximum of Rs two lakhs. One of the main features of a Post Office savings account is that there is no lock-in or maturity period. Opening an account of this kind is relatively hassle-free, since one can walk into any post office, complete the formalities with the clerk, and open an account immediately.

New Service Charges on Post Office Savings

If you want to open a post office savings scheme, keep in mind that a few service charges are applicable as well:

  • Issuing duplicate cheque book: Rs.50
  • Issuing deposit receipt: Rs.20 per receipt
  • Issuing account statement: Rs.20 per statement
  • Cancellation or change of nomination: Rs.50
  • Passbook issuance in lieu of missing or mutilated certificate: Rs.10 per registration
  • Issuing a cheque book in Savings bank account: No fee will be charged up to 10 leaves in a financial year. (Rs.2 per cheque leaf thereafter)
  • For transferring an account, and pledging of an account: Rs.100
  • Cheque dishonor fee: Rs.100

Eligibility to Open Post Office Savings Account

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

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

Post Office Savings Accounts Interest Rate

Post Office savings account interest rate is decided by the Central Government from time to time and is generally between 3% to 4%. Interest is calculated on monthly balances and credited annually.

Post Office Savings Accounts earn a fixed rate of interest through the year, subject to change from time to time, as declared. Currently, the interest rate is as given below:

Details Percentage (p.a.)
Rate of Interest 4%

Other Post Office Investment Options

S.No Investment Option Rate of Interest (p.a.)
1 Public Provident Fund (PPF) 7.1% compounded annually
2 Senior Citizen Savings Scheme (SCSS) 7.4%
3 Kisan Vikas Patra (KVP) 6.9 % compounded annually
4 Sukanya Samriddhi Yojana (SSY) 7.6%
5 Post Office Monthly Income Scheme (MIS) 7.3 % payable monthly
6 National Savings Certificate (NSC) 6.8 % compounded annually

Post Office Savings Account Withdrawals

In a Post Office savings account the amount deposited can be withdrawn at anytime as per the depositor’s needs. The withdrawal is, however, subject to the maintenance of a minimum balance of Rs. 50 in a simple account and Rs. 500 for accounts with cheque facility.

Features of Post Office Savings Account

The main features of a Post Office savings account are:

  • You can choose to close the account at any time of his or her choosing
  • Minors above the age of 10 years can operate their accounts
  • To keep the account active at least one deposit or withdrawal must be done once in 3 years
  • The account can be opened only using cash
  • Nomination facility is available at the time of opening the account and after opening the account
  • Interest earned is tax free up to Rs 10,000 per year
  • Income tax relief is available on the amount of interest under the provisions of section 80L of the Income Tax Act.
  • The account can be transferred from one post office to another
  • Single accounts can be converted to joint accounts and vice versa
  • Deposits and withdrawals can be done through any electronic mode in CBS Post offices.
  • Transactions can be done via ATMs

Post Office Savings Account Benefits

Customers who wish to open these accounts have access to cheque and ATM facilities. Some attractive Benefits of Post Office Savings Accounts have been listed below:

  • Cheque facility: Cheque facility is available and can be request for existing accounts as well.
  • ATM/Debit card: For those account holders who have maintained the prescribed minimum balance on the day of issuance of the debit card, CBS Post Offices can grant ATM/Debit cards.
  • Minor Accounts: Post Office Savings Account is available to minors. For minors below the age of 10, an account can be opened in their name, but the parent or guardian will be given rights to operate the account on their behalf. Minors of 10 years and above can operate the account on their own.
  • Portability: If you shift your residence or are not happy with the services of the post office branch or for any other reason, you can shift your Post Office Savings Account to a branch of your choice. Only one account can be opened in one post office.
  • Nomination: The facility to nominate someone is made available under these accounts at the time of opening the account. The account holder can also choose to nominate a person to receive the proceeds of this account after their demise at any time.
  • Joint Holdings: Two or three adults are allowed to hold an account together under the joint account facility. A single account can be converted to a joint account and vice versa.
  • Tax Exemptions: Two or three adults are allowed to hold an account together under the joint account facility. A single account can be converted to a joint account and vice versa.
  • Electronic Facilities: Customers can make withdrawals and deposits through any electronic mode in CBS Post offices.
  • Long period for Inactivity: In order to keep the account active you only need to carry out one transaction of a deposit or withdrawal in 3 financial years. The account will not be deemed inactive unless there are no transactions for 3 financial years.

FAQ’s on Post Office Savings Account

  1. What happens to the amount in the event of the death of the depositor?
  2. If the depositor dies the amount shall go to the nominee. In case the account is without a nomination at the time of the depositor’s death and the amount due is not exceeding Rs 60,000, the Department of Post Office may pay the same to a person appearing before him, who is entitled to receive it or to administer the estate of the deceased.

  3. How many accounts can be opened at one post office?
  4. Only one account and one joint account can be opened at one post office

  5. How can a person avail of the cheque system facility for a post office savings account?
  6. Application for availing the facility of Cheque System be submitted on Form SB/CQE-4 and requisition for fresh Cheque Book for Savings Account on Form SB/CQE-4A.

  7. What is the procedure for opening a Post Office Savings Account?
  8. Opening a Post Office Savings Account is very simple.

    • Procure a form from the post office or online.
    • Submit the duly-filled and signed form along with the required KYC documents and a photograph.
    • Pay the amount you would like to deposit subject to a minimum of Rs.20.
    • Your deposit will be opened for you.
    • For senior citizens, there are separate forms available.
  9. What are the documents required to open a Post Office Savings Account?
  10. You need to comply with the KYC norms according to your risk category. Generally, to open a savings account at the post office, you need to submit the following:

    • ID Proof
      • Electoral Photo Identity card
      • Aadhaar
      • Ration Card with photograph
      • Passport
      • Driving License
      • Photo Identity Card issued by recognized, University/ Education Board/ /College/School, Identity card from Central/State Government or PSU.
    • Address Proof
      • Bank or Post Office Passbook/Statement with current address
      • Passport
      • Ration Card with current Address
      • Electricity Bill
      • Telephone Bill not more than three months old
      • Salary Slip from a reputed Employer with current address,
      • Aadhaar
    • One (two in case of EDBO) recent Passport Size Photographs are to be given. In case of Joint Account, photograph of all joint holders should be given.
  11. Can I apply for a duplicate passbook?
  12. You can get a duplicate passbook from the sub post offices only. To apply for a duplicate passbook, fill up an application in the prescribed form or manuscript application and submit it along with the prescribed fee, if any, in the form of postage stamp.

  13. What are the norms for issuing a Cheque Book?
  14. To be eligible for a cheque book at the time of opening an account, you must make an initial deposit of Rs.500. If you wish to get a cheque book at any other time, you must maintain a minimum balance of Rs.500 in your account and request the post office to issue a cheque book.

  15. Can I transfer my post office savings account from one post office to any other post office?
  16. Yes, you can shift your savings account from 1 post office to another.

  17. If I have an individual post office savings account, can I modify it to a joint savings account?
  18. Yes, you are allowed to modify your individual post office savings account to a joint post office savings account. You may also do vice versa, wherein, you can change your joint account to an individual account.

  19. Do post office savings accounts come with debit or ATM cards?
  20. There a few core banking post offices that provide customers with debit or ATM card options.

  21. For keeping my post office savings account active, what is the minimum number of transactions needed?
  22. To keep your account active, you will be required to make at least one deposit or withdrawal transaction in a period of 3 financial years.

  23. What is the rate of interest for Joint Post Office Savings Accounts?
  24. For joint and individual post office savings accounts, the rate of interest is 4% p.a.

  25. Where can I get a new duplicated passbook?
  26. You can get a new duplicated passbook only at sub post offices.

News on Post Office Savings Account

  • Union Budget 2022 Update: Post offices will enter the digital field to help rural farmers and senior citizens

    In the budget 2022, Finance Minister Nirmala Sitharaman announced that 100% of 1.5 lakh post offices will step into the digital ground and the core banking system. They will be enabled with financial inclusion and there will also be access to post office accounts via mobile banking, net banking, and ATMs. Services like online transfer of funds between two post office accounts and bank accounts will also be available. This will help farmers and all senior citizens who live in the rural areas and also enable inter-operability.

    01 Feb 2022

  • Post office schemes offer higher interest rates than FDs

    On 30 September 2020, the Central Government announced that the interest rates of small savings schemes will not be changed for the third quarter of the financial year 2020-2021. The difference in the interest rates between small savings schemes and fixed deposits ranges between 0.60% and 0.40%. The government has not reduced interest rates over the last two quarters. The RBI has been reducing the FD rates since January 2019. The one fixed-deposit scheme offered by SBI, HDFC Bank, and 5%, respectively. The one-year time deposit scheme offered by India Post comes with an interest rate of 5.50%. The highest interest rate offered by the post office time deposit scheme is 6.70%.

    07 Oct 2020

  • Aadhaar-linked post office savings account now eligible for subsidy transfer

    You can get direct benefit transfer (DBT) of government subsidies, if you are eligible, in your post office savings account by seeding the Aadhaar. The Department of Posts had issued a circular about this on 11 August, 2020.

    According to the circular, in order to facilitate the POSB Account holder for availing DBT benefits in the Post Office Savings Account, the authority has made a decision to incorporate column for Aadhaar Seeding in "Application for Opening of Account /Purchase of Certificate" form for benefits. The circular came after the government had issued common application forms for investing in National Savings Scheme, Public Provident Fund, and other savings schemes.

    08 Sept 2020

  • Different types of post office schemes

    There are different types of savings schemes under the post office investments category. Some of these are: Savings account, which has a minimum balance of Rs.500 and which offers an interest of 4% p.a., similar to a bank savings account. There is online banking, cheque, and ATM facility also available. There is a penalty of Rs.100 for not maintaining the minimum balance. The next type of post office scheme is the five-year recurring deposit account, which offers an interest rate of 7.2% p.a. and is ideal for minors to start the habit of savings. You can take a loan of up to 50% of the amount after one year, which you have to pay back with interest within the balance tenure of the account. The time deposit account is another type of savings scheme that offers tenures on fixed deposits for one year, 2 years, 3 years, and 5 years with interest rates of 6.9% p.a. for the first 3 tenures and 7.7% p.a. for the 5-year tenure. The minimum investment is Rs.1,000 with additional investments in multiples of Rs.100. Although the interest is paid out monthly, it is calculated on a quarterly basis. There is a taxable deduction on the five-year deposit under Section 80C of the Income Tax Act. The Monthly Income Scheme account gives you an interest rate of 7.6% p.a. which is paid monthly with a maturity period of 5 years and maximum of Rs.4.5 lakh for an individual account and Rs.9 lakh for a joint account.

    18 Feb 2020

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