What is the current Post Office Savings Account interest rate?

The Post Office Savings Account (POSA) offers an interest rate of 4% per annum, compounded annually. This rate has been stable and is reviewed by the Ministry of Finance every quarter.

Is Post Office Savings Account interest tax-free?

Interest up to Rs 10,000 per year on Post Office Savings Account is exempt from income tax under Section 10(15)(i) of the Income Tax Act. Interest above this limit is taxable as per your income slab.

What is the minimum balance for a Post Office Savings Account?

The minimum balance required to keep the account active is Rs 500 for a non-cheque account and Rs 500 for a cheque-linked account. If balance falls below this, a Rs 100 account maintenance fee is deducted annually.

Can I open a Post Office Savings Account online?

You can open a Post Office Savings Account at your nearest post office with KYC documents. Online account opening is available through the India Post Payments Bank (IPPB) app for IPPB accounts. Traditional POSA still requires physical visit.

How does Post Office Savings Account compare to bank savings accounts?

At 4% p.a., POSA offers returns comparable to most public sector bank savings accounts and higher than many private banks' basic savings rates. The government backing and deposit safety make it attractive for conservative savers.

Post Office Savings Account Interest Rate 2026 — Full Guide

📅 March 24, 2026 ⏱️ 6 min read

The Post Office Savings Account (POSA) remains one of India's most trusted savings instruments, backed by the sovereign guarantee of the Government of India. With over 35 crore active accounts across India, it serves as the primary banking service for millions in rural and semi-urban areas where commercial banks have limited presence.

In this complete guide, we cover the current interest rate, tax implications, account features, comparison with other small savings schemes, and a step-by-step guide to opening your account.

Post Office Savings Account Interest Rate 2026

The current interest rate on Post Office Savings Account is 4.0% per annum, calculated on the minimum balance between the 10th and last day of each month and credited annually on 31st March.

Important: Small savings scheme interest rates are set by the Ministry of Finance and reviewed quarterly (April, July, October, January). Check the latest notification at finmin.nic.in for any recent changes.

Interest Rate History (Post Office Savings Account)

Period	Interest Rate (p.a.)
April 2020 – Present	4.0%
January 2019 – March 2020	4.0%
July 2017 – December 2018	4.0%
April 2016 – June 2017	4.0%
Before April 2016	4.0%

Key Features of Post Office Savings Account

Minimum opening deposit: Rs 500
Minimum balance: Rs 500 (otherwise Rs 100 annual maintenance fee deducted)
Maximum deposit: No limit (single or joint accounts)
Interest rate: 4% p.a. compounded annually
Cheque book facility: Available (minimum balance Rs 500)
ATM/Debit card: Available at select post offices (CBS-enabled)
Internet banking: Available through India Post Payments Bank integration
Nomination: Can nominate up to 4 nominees
Joint account: Can be opened jointly (maximum 3 adults)
Minor account: Can be opened for minors aged 10 and above (operated by minor themselves)

Tax Benefits on Post Office Savings Account

Section 10(15)(i) Exemption

Under Section 10(15)(i) of the Income Tax Act, 1961, interest income from Post Office Savings Account is exempt from income tax up to:

Rs 10,000 for an individual or HUF (single account)
Rs 10,000 for joint account (shared between account holders)

Interest earned above Rs 10,000 is taxable as "Income from Other Sources" and must be disclosed in your ITR. At 4% p.a., you would need a balance exceeding Rs 2.5 lakh to cross the Rs 10,000 threshold.

No TDS on Post Office Savings Account

Unlike bank FDs, Post Office Savings Account does NOT attract TDS (Tax Deducted at Source), even if interest exceeds Rs 10,000. However, you are still legally required to declare and pay tax on taxable interest in your ITR.

Comparison: Post Office Savings Account vs Other Small Savings Schemes

Scheme	Interest Rate	Tenure	Tax Benefit
Savings Account (POSA)	4.0% p.a.	No lock-in	Up to Rs 10,000 exempt
Post Office RD (5-year)	6.7% p.a.	5 years	None (taxable)
Post Office TD (1-year)	6.9% p.a.	1 year	None
Post Office TD (5-year)	7.5% p.a.	5 years	80C deduction
PPF	7.1% p.a.	15 years	EEE (fully exempt)
NSC (5-year)	7.7% p.a.	5 years	80C deduction
Senior Citizen Savings Scheme	8.2% p.a.	5 years	80C deduction

How to Open a Post Office Savings Account

Documents Required

Duly filled Account Opening Form (SB-3)
Identity proof: Aadhaar card, PAN card, Voter ID, Passport, or Driving License
Address proof: Same as above or recent utility bill
2 passport-size photographs
Initial deposit: Minimum Rs 500 (cash)

Step-by-Step Process

Visit your nearest post office (use our PIN code search to find the post office for your area)
Collect and fill Form SB-3 (Account Opening Form)
Submit the form with KYC documents and photographs
Make the initial deposit (minimum Rs 500)
Receive your passbook immediately
ATM card (if requested) is issued separately within 7-14 days

Transferring Your Post Office Savings Account

One of the most convenient features of POSA is the ability to transfer your account to any post office in India. This is useful when you relocate. Submit Form SB-10(b) at your current post office, and the account will be transferred to the new post office within 30 days.