Post Office Saving Account

Post Office Savings Account can be opened individually or with 2-3 adults jointly at any post office in India. Investment limit is Rs 1, 00,000 if held singly or Rs 2, 00,000 if held jointly. If you hold multiple accounts, for example one singly and one jointly your investment in all accounts taken together cannot exceed Rs 1, 00,000.

A minimum balance of Rs 50 must be maintained or Rs 500 if opted for cheque facility. Interest earned on Post Office Savings Account beyond Rs 3500 on a single account or Rs 7000 on a joint account is taxable. To claim deduction interest will need to be declared while filing IT returns.

Like in a bank account, an account holder gets a cheque book. Similarly entries can be made in a Pass Book. If not operated for 3 years continually the account becomes inactive and a charge of Rs 20 p.a. will be levied. An account gets canceled if the balance becomes nil after deduction of the charges.

Min & Max Investment

Min- Rs 50, Max- Rs 1, 00,000 for single a/c or Rs 2, 00,000 for joint a/c

Current Rate of Interest

4% p.a.

Maturity/ Tenure

Not applicable

Tax Benefit

Tax-free interest up to Rs 3500 in single a/c & up to Rs 7000 in joint a/c


In the current scenario money in savings account in most banks earns 4% interest rate per annum. Service provided in post offices is a poor match to those provided in banks. Interest earned in a bank Savings Account is taxable. Unless you live in a remote rural area with no banks around it makes more sense to put away your money in a bank savings account than in a post office savings account.

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