A Post Office Savings Account (POSA) is a basic savings bank account offered by the India Post through post offices across India. It functions similarly to a regular savings account you’d open at a bank, but it’s backed by the
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| Indian Post Office Savings Account (POSA) Schemes |
Key
Features of a Post Office Savings Account
Interest
Rate
Currently,
the interest rate on a POSA is 4% per annum (for the January–March 2026
quarter), as notified by the Ministry of Finance. This is higher than many
bank savings accounts, which often offer around 2.5%.
Interest
Calculation & Credit
Interest
is calculated monthly based on the minimum balance between the 10th and the
last day of the month.
It is credited
annually at the end of the financial year (March 31).
Minimum
Balance & Transactions
Minimum
deposit to open and maintain the account is
typically ₹500.
Minimum
withdrawal amount is usually ₹50.
If the
balance falls below ₹500 by the end of the financial year, maintenance
charges may apply or the account may be treated as inactive/dormant.
Who
Can Open POSA
Individuals
(adults)
Joint
accounts with two adults (Joint A or Joint
B)
Guardians for a minor or for a person of unsound mind
Minors
above 10 years in their own name
Each
individual can have only one Post Office Savings Account.
Accessibility
& Facilities
Available
at post offices nationwide, making it accessible in rural and urban
areas alike.
Core
banking features such as ATM/Debit card, online banking/Internet
banking, and mobile banking are increasingly available depending on
the branch.
Tax
Treatment
Interest
earned up to ₹10,000 in a financial year is exempt from tax under Section
80TTA of the Income Tax Act.
Charges
& Other Rules
Some services may have small fees,
such as for issuing a duplicate passbook or account statements.
Account Inactivity
If there are no transactions for
continuous years, the account can become dormant or silent and may need reactivation
with KYC documents.
Why Consider a POSA?
Backed by the Government of India (safe
and secure)
Steady interest rate useful for
long-term savings
Wide physical presence makes it
easy to open and operate
Ideal for those without access to formal
bank branches
