Post Office Savings Account: Opening, Balance Rules and Interest

You can open a post office savings account at any post office with ₹500, your Aadhaar and your PAN. The account pays 4% a year, and the balance must stay at ₹500 or more. Interest is worked out each month and credited once a year, at the end of the financial year.

Key facts

Who can open one and documents needed

Under paragraph 3 of the 2019 scheme, an account can be opened in Form-1 by:

• a single adult;
• two adults jointly;
• a guardian for a minor, or for a person of unsound mind;
• a minor aged 10 or more, in their own name.

You can hold only one single account. A child cannot have both a guardian-run account and one in their own name. In a joint account, each holder owns an equal share; if one dies, the survivor becomes sole owner, unless they already hold a single account, in which case the joint account must be closed.

A separate Basic Savings Account is available to people registered under a government welfare scheme. It needs no opening deposit and no minimum balance.

For KYC, the Department of Posts asks for your Aadhaar number, or proof that you have applied for Aadhaar, and your PAN or Form 60. If you open without PAN, you must submit it within two months once your balance crosses ₹50,000, your credits in a year cross ₹1 lakh, or your monthly withdrawals cross ₹10,000. Otherwise the account stops being operational until you do.

Steps to open the account

1. Visit any post office that offers savings bank services.
2. Ask for the account opening form (Form-1) and fill in your details and nominee.
3. Attach a photograph and self-attested copies of your Aadhaar and PAN, and carry the originals.
4. Make the opening deposit of at least ₹500.
5. Collect your passbook once the account is opened.

Minimum balance and charges

No withdrawal is allowed if it would bring the balance below ₹500. If the balance is below ₹500 on the last working day of the financial year, ₹50 (including GST) is deducted as a maintenance fee. If that fee takes the balance to zero, the account closes automatically.

An account with no deposit or withdrawal for three full years becomes a silent account. Interest credits do not count as transactions. You must apply to revive it before you can use it again.

Interest rate and how it is credited

The rate is 4% a year. The National Savings Institute lists it at 4% from 1 December 2011, and the Finance Ministry kept all small savings rates unchanged for 1 July to 30 September 2026. Rates for October–December 2026 are due around 30 September.

Interest is calculated for each calendar month on the lowest balance between the close of the 10th day and the month end. It is credited once, at the end of the financial year. A few rules follow from this:

• Money deposited after the 10th earns nothing for that month.
• No interest is paid for a month in which the balance falls below ₹500 at any time between the 10th and the month end.
• If you close the account, interest is paid up to the end of the previous month.

At 4%, a steady balance of ₹50,000 earns about ₹2,000 a year. Compare that with bank rates on our savings account interest rates page, and with the other schemes on the small savings rates page.

Cheque book, ATM and online banking

You get a 10-leaf cheque book free each year on request; further cheque books cost ₹2 a leaf. Withdrawals can be made with the passbook and Form-2, by cheque, or electronically.

Internet banking: the Department of Posts’ e-banking portal needs an active single or joint savings account, an active debit card, a unique mobile number, an email address and PAN. You register at your home branch with a form; activation follows on the next business day. Once active, you can transfer money between post office accounts, pay into RD and PPF accounts, and open RD and time deposit accounts online.

IPPB link: you can link the account to an India Post Payments Bank savings account. IPPB moves any balance above ₹2 lakh at the end of the day to the linked post office account, and sweep-in and sweep-out carry no charge.

Tax on interest

Interest is taxable as income from other sources, with one exemption. Under Section 10(15)(i) of the Income-tax Act, 1961, interest up to ₹3,500 a year from a single post office savings account, or ₹7,000 from a joint account, is exempt. Tax experts quoted by Upstox say this exemption is available in the new tax regime too.

In the old regime, interest above the exempt amount can be claimed under Section 80TTA, up to ₹10,000 a year across all savings accounts. These figures apply to FY 2025-26 returns, which are filed under the 1961 Act. From tax year 2026-27 the Income-tax Act, 2025 applies, so check its corresponding provision when you file next year.

Transferring or closing the account

To move the account to another post office, apply in Form-5 at either office with the passbook and the transfer fee of ₹100 set in the General Rules. The account keeps running at the new office.

To close it, submit Form-2 with the passbook and any unused cheque leaves. Interest is paid up to the end of the month before closure. For the post office’s term deposits, see our guide to the post office time deposit, and the post office savings schemes page lists every scheme.

Frequently asked questions

What is the minimum balance in a post office savings account?

₹500. If the balance is lower at the end of the financial year, ₹50 is deducted as a maintenance fee.

What is the post office savings account interest rate?

4% a year, calculated monthly on the lowest balance between the 10th and the month end and credited at the end of each financial year.

Can I open more than one post office savings account?

You can hold only one single account. You can also hold joint accounts.

Can a minor open a post office savings account?

A guardian can open one for a minor of any age. A child aged 10 or more can open one in their own name, but not if a guardian-run account already exists.

Is post office savings account interest tax-free?

Up to ₹3,500 a year for a single account and ₹7,000 for a joint account is exempt under Section 10(15)(i) of the 1961 Act. Interest above that is taxable.

What happens if I don’t use the account for three years?

It becomes a silent account. You must apply at the post office to revive it before making any transaction.

Can I open a post office savings account online?

No. You open it at a post office. Once it is active, internet banking and an IPPB link let you use it online.

Sources

• Post Office Savings Account Scheme, 2019 — National Savings Institute, Ministry of Finance (checked 16 Sep 2026)
• Post Office Savings Account interest rate history — National Savings Institute (checked 16 Sep 2026)
• Government Savings Promotion General Rules, 2018 (transfer, Form-5, fees) — National Savings Institute (checked 16 Sep 2026)
• Interest rates on small savings schemes, July–September 2026 — Department of Economic Affairs (checked 16 Sep 2026)
• Aadhaar and PAN requirement for small savings accounts — Department of Posts (checked 16 Sep 2026)
• Internet banking FAQ — Department of Posts (checked 16 Sep 2026)
• IPPB and POSA linkage — India Post Payments Bank (checked 16 Sep 2026)
• Exempt income — Income Tax Department (checked 16 Sep 2026)
• Section 80TTA deduction on savings interest — AU Small Finance Bank (checked 16 Sep 2026)
• Post office savings interest exemption under the new regime — Upstox (checked 16 Sep 2026)