Post Office Savings Account- Interest Rates & Features

A post office savings account is a secure investment that offers easy liquidation of funds, fully or partially, at short notice. It also has attractive interest rates and features.

How to open Post Office Savings Account

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

Post Office savings accounts are also best suited for those individuals living in rural and semi-rural areas, which have limited exposure to banking. Due to the large network of post offices in India, the government introduced the concept of opening savings accounts through post offices, especially since the country-wide reach of post offices is far greater than banks.

A Post Office savings account can be opened at any post office with a minimum balance of Rs 20. 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.

Interest rate for the first quarter of Financial year 2017-18 i.e. Apr’17 to Jun’17

S.No Investment Option Rate of Interest for Quarter 1 : Apr'17 to Jun'17
1   Public Provident Fund (PPF) 7.90%
2 Senior Citizen Savings Scheme (SCSS) 8.40%
3 Kisan Vikas Patra (KVP) 7.60%
4 Sukanya Samriddhi Yojana (SSY) 8.40%
5 Post Office Monthly Income Scheme (MIS) 7.70%
6 National Savings Certificate (NSC) 7.90%
7 Savings Bank Account 4.00%

Who is eligible to open 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.

Withdrawal of money from post office savings account

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 cheque facility accounts.

Post office savings account Interest Rates

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.

Features of post office savings account

The main features of a Post Office savings account are:

  • The depositor can choose to close the account at any time of his or her choosing
  • The account can be opened by cash only
  • Nomination facility is available at the time of opening the account as well as after opening the account
  • Interest earned is tax free up to Rs 10,000 per year from financial year 2012 - 13
  • 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.

Benefits of post office savings accounts

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

Under the provisions of section 80L of the Income Tax Act, interest earned from the savings in these accounts are exempt from tax for up to Rs.10,000 earned per year.

    • 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.

Interest rate post office savings accounts

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 per annum
Rate of Interest 4% p.a.

Charges and Requirements of Post Office Savings Accounts

Details Amount
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
Tax Free Interest Up to Rs.10,000 p.a.

Income Tax Benefit

Income tax relief against the interest earned from the savings in these accounts is available on under the provisions of section 80L of Income Tax Act, 1961.

FAQ’s

1. What happens to the amount in the event of the death of the depositor?

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.

2. How many accounts can be opened at one post office?

Only one single account and one joint account can be opened at one post office

3. How can a person avail of the cheque system facility for a post office savings account?

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.

4. What is the procedure for opening a Post Office Savings Account?

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.

5. What are the documents required to open a Post Office Savings Account?

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 such as Electoral Photo Identity card, Aadhaar or the letter issued by the Unique Identification Authority of India (UIDAI), 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 such as Bank or Post Office Passbook/Statement with current address Passport, Ration Card with current Address, Electricity Bill, Telephone Bill of not more than three months old, Salary Slip of reputed Employer with current address, Aadhaar or the letter issued by the Unique Identification Authority of India (UIDAI).
  • 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.

6.Can I apply for a duplicate passbook?

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.

7.What are the norms for issuing a Cheque Book?

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.

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Post Office Savings Account Reviews

Page 1 of 6 1 2 3 4 5
  • Post Office Fixed Deposit
    "Good investment plan"
    INDIA POST OFFICE
    0.5 5.0/5 "Blown Away!"
    I have started investing in the fixed deposit almost more than 5 years. I have invested a variable amount in different times. They have offered me a interest rate of 7.5%. The response was good. I have chosen the post office because of the safe and security.
    Was this review helpful? 0
    , guwahati
    Reviewed on Dec 12, 2018
  • review Other Loan
    "Good insurance policy"
    INDIA POST OFFICE
    0.5 5.0/5 "Blown Away!"
    I have ourchased the a life insurance policy in postal office. This is the best insurance policy which i have taken. I have been paying the premium amount of Rs. 390 but i will get a maturity amount of Rs. 1 lakhs. 7 years ago, i have purchased this book. This policy can able to take only the Government undertaken people. I never called the customer care people. The premium is less but the benefits are high.
    Was this review helpful? 0
    , chennai
    Reviewed on Dec 02, 2018
  • review Other Loan
    "Online service should be improved"
    INDIA POST OFFICE
    0.5 5.0/5 "Blown Away!"
    As per post office norms per day I can deposit Rs. 50,000 I can with draw the same limit, they are providing credit interest rate its very low. I have received the debit card, its accessible in all the atm. But there is no online payment options.
    Was this review helpful? 0
    , bangalore
    Reviewed on Dec 01, 2018
  • review Other Loan
    "Online transaction should be implement"
    INDIA POST OFFICE
    0.5 4.0/5 "Great!"
    I make RD deposit around Rs. 3000 it has the period of 5 years, my deposit amount around Rs. 1.8 they will providing around Rs. 2 lakhs with 5% of interest, the post office staff are responding well and they are providing quick service. Its safe and trust because its running by government. I make the payment through cash , they don't have online options.
    Was this review helpful? 0
    , bangalore
    Reviewed on Dec 01, 2018
  • Post Office Fixed Deposit
    "Better Investment For FD account in post office"
    INDIA POST OFFICE
    0.5 5.0/5 "Blown Away!"
    Earlier I invested in FD at post office, after five year I got the deposit amount with the best interest, payment mode is only cash. For Rs. 10,000 fixed deposit I got around Rs. 15,000 it helped me out. The service is also good in post office, the staff are responding well. Its good for domestic service.
    Was this review helpful? 4
    , bangalore
    Reviewed on Nov 30, 2018
  • review Other Loan
    "Better interest rate with post office"
    INDIA POST OFFICE
    0.5 5.0/5 "Blown Away!"
    Regarding postal saving they need minimum amount to be maintained for the salary account there is no balance required its absolutely zero balance. For pensioner also its a zero balance, now a days post office is providing debit card for saving account. I would recommend this post office for saving purpose I get better interest.
    Was this review helpful? 1
    , bangalore
    Reviewed on Nov 30, 2018
  • Post Office Fixed Deposit
    "Good interest rate"
    INDIA POST OFFICE
    0.5 5.0/5 "Blown Away!"
    I have invested the money in post office account recently. I have chosen the post office 5 years back. Its because of the safe and security and elements of the post office. Interest rates are more when i compared with other private bank. I have invested the money of Rs. 1.5 lakhs. Its easy to invest the money. I have a friend who is working over there helped me a lot.
    Was this review helpful? 3
    , chennai
    Reviewed on Nov 30, 2018
  • review Other Loan
    "Satisfactory"
    INDIA POST OFFICE
    0.5 3.0/5 "Satisfactory"
    They are not treating the customer well in their place. They are not ready to help the customer at all in a time. I' ll save half of my salary in post office savings account. I have opened the post office savings account 6 months before. I have to maintain a minimum balance of Rs. 5000. They are providing a interest rate of 4%. There is no hidden charges. They have not given any debit card whenever i ask them, they will irrelevant response.
    Was this review helpful? 0
    , chennai
    Reviewed on Nov 18, 2018
  • review Education Loan
    "Excellent service"
    INDIA POST OFFICE
    0.5 5.0/5 "Blown Away!"
    I have been using Education insurance for my daughter from post office, they have charge me premium up to 4000 per month it nominal amount they have charge me and i use to pay my premium through cash only , there service is good and i use Eulip policy in this policy like after 21 year of age my daughter will get this education insurance.
    Was this review helpful? 0
    , bangalore
    Reviewed on Nov 18, 2018
  • Post Office Fixed Deposit
    "Need scope of improvement"
    INDIA POST OFFICE
    0.5 3.0/5 "Satisfactory"
    Earlier I have taken fixed deposit in Post office, I have deposited the amount of Rs. 8 lakhs, they are providing 8% for interest for the period of one year. Now it came down, the benefits are good but I need to engage with the agent to invest the money in FD. Their service is not upto the mark.
    Was this review helpful? 9
    , hyderabad
    Reviewed on Nov 13, 2018
  • review Other Loan
    "Good for beginners"
    INDIA POST OFFICE
    0.5 5.0/5 "Blown Away!"
    India Post office is trusted one and the brand name is good. Only for tax saving purpose I am holding recurring deposit. Its a government organization service is okay, there is no extra fee taken from my end. I can deposit for five years they will be providing the interest around 18%.
    Was this review helpful? 0
    , chennai
    Reviewed on Nov 09, 2018
  • Post Office Fixed Deposit
    "Good service"
    INDIA POST OFFICE
    0.5 3.0/5 "Satisfactory"
    I have a Fixed Deposit account with India Post Office from last 1 year, i have invested an amount Rs 1 lac and maturity period is after 5 years. Customer service is very good and they explained all the terms and conditions. I get a returns of 7% and i am satisfied with it.
    Was this review helpful? 19
    , hyderabad
    Reviewed on Sep 26, 2018
  • review Other Loan
    "Best banking service"
    INDIA POST OFFICE
    0.5 5.0/5 "Blown Away!"
    I have a salary account with India Post Office from last 10 years, the banking services and their facilities are very good in this bank. Customer service is good and their response is on time. I do all my transactions using ATM debit card and cheque.
    Was this review helpful? 2
    , chennai
    Reviewed on Sep 06, 2018
  • review Other Loan
    "Nice experience"
    INDIA POST OFFICE
    0.5 5.0/5 "Blown Away!"
    I also have a savings account with India post office. I have taken it as it more secured and the process to open this account is good too. I would also get the passbook and ATM card. I need to invest on a monthly basis. Overall it has been a satisfactory experience.
    Was this review helpful? 2
    , secunderabad
    Reviewed on Sep 06, 2018
  • review Other Loan
    "More than satisfactory"
    INDIA POST OFFICE
    0.5 5.0/5 "Blown Away!"
    I have also taken a another investment with India Post office. It is a savings scheme called Sukanya Samriddhi Yojana. There are good benefits in the scheme which is useful to me in a long term. The investment is nominal too. Overall no issues.
    Was this review helpful? 1
    , secunderabad
    Reviewed on Sep 06, 2018
  • review Other Loan
    "Excellent"
    INDIA POST OFFICE
    0.5 5.0/5 "Blown Away!"
    I have taken a National Savings Certificate with India post office. The tenure is for five years and after the tenure, I would get the sum assured. The services and response is good and the process is easy to get the same. Overall it has been a good experience.
    Was this review helpful? 2
    , secunderabad
    Reviewed on Sep 06, 2018
  • review Other Loan
    "Better"
    INDIA POST OFFICE
    0.5 4.0/5 "Great!"
    I am having the savings account with the Post office and it was opened within two days of time. I would like to say that the response is good one with the India post office till now. I am really happy with them as such.
    Was this review helpful? 6
    , hyderabad
    Reviewed on Jun 23, 2018
  • review Other Loan
    "Good service"
    INDIA POST OFFICE
    0.5 5.0/5 "Blown Away!"
    I have opened the savings account from the INDIA POST OFFICE, the name of the savings process is Sukanya Samrudhi Yojana, which is provided by the prime minister from central government. I have paid Rs,30,000 to open this account which is helpful for the savings.
    Was this review helpful? 10
    , hyderabad
    Reviewed on Apr 18, 2018
  • review Other Loan
    "Good for Girl Child"
    INDIA POST OFFICE
    0.5 4.0/5 "Great!"
    I have opened Sukanya Samriddhi scheme from Post office for my girl baby. It was a good one, I continued for 2 to 3 years. Investment amount starts from 1000 to 65,000 per year it has locking period of 12 years. After 18 years I can maturity benefits for girl child education, marriage. Total Purpose of the scheme is excellent with good interest.
    Was this review helpful? 4
    , mumbai
    Reviewed on Feb 15, 2018
  • review Other Loan
    "Good Investment"
    INDIA POST OFFICE
    0.5 5.0/5 "Blown Away!"
    I had RD in post office, now it got matured. Earlier they gave me around 6.2% of interest. It had the term of five years, my monthly investment was Rs.500, I got the maturity benefits of Rs. 36,000. They gave me cheque interest end of the tenure.
    Was this review helpful? 2
    , chennai
    Reviewed on Feb 13, 2018
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