Post Office Savings Account is most similar to a savings bank account. Like the savings bank account, you can deposit any sum as per your wish. You can withdraw your money using an atm card. You can even transfer the money by using an internet facility. A certain rate of interest is earned through the standing balance of your account.
The interest earned has a tax exemption feature. There is no need to maintaining a balance in your post office savings bank account. You can even have a zero-balance account. Interest earned through post office savings account is 4.00% per annum. If you have a post office savings account then you can apply for the various post office schemes with ease.
Table of Contents
1) What is a Post Office Savings Account (POSA)?
When you invest in a savings scheme you need to deposit until the tenure of that scheme. You can withdraw the entire balance only when the maturity period gets completed. As in the case of an emergency other than some schemes you can’t withdraw from the scheme. Also, you can’t make any online transactions through that scheme.
In this scenario post office savings bank account serves all these purposes. You can get a quite decent interest rate of 4.00% on your balance. In case of emergency you can withdraw using the atm card or by visiting directly to the post office. There is no need of making deposits on time.
2) Why post office savings account (POSA)?
The interest rate, 4.00% is a fixed interest so that you can earn a steady income. As the post office savings account is backed by the Government of India, it has low risk, thus providing greater security to your account. Most importantly it offers full and partial withdrawals whenever possible. You can enjoy the benefits of an internet banking facility.
The most important reason is that post offices have spread all over the nation. Savings account in Banks couldn’t reach the rural areas as much as the post offices. People in rural areas are mostly daily wages workers. They could earn a very small amount as their income.

They search for the best and safe investment option for saving their little money. In this scenario, the post office savings account will be the best source to save money. The working of this account is simple and most efficient for them as compared to Banks’ savings account. They can even make a minimum deposit of Rs20 in their post office savings account (POSA).
3) What are the eligibility criteria to open a post office savings account?
To open a post office savings account you need to be eligible over certain criteria.
- A single adult individual can open an account
- Two adults or three adults can open a post office joint savings account
- Individual who is opening a post office account must be an Indian
- A minor who is at the of 10 and above can open an account
- An individual adult can open an account on behalf of a minor
- You can also open an account on behalf of an unsound mind person
- In a joint account, on the death of one person, the account will be handed to the second holder. If the second holder already holds another savings account then this account got closed.
- If you are a minor you need to fill the application form and need to do the KYC verification again after attaining the age of 18. Hence you will be regarded as a major.
These are the certain eligibility criteria to open a post office savings account.
3.1) Documents needed to open post office savings account
For the KYC verification process, you are asked to attach some of the documents as proof. They are
- For identity proof, you can submit an Aadhar card, PAN card, Passport, Voter-id, and, driving license.
- Then you need to submit a photo identity card. This can be issued by recognized universities, Education Board, or it can be a college or the school identity card. Or it can be an identity card from PSU or State and Central Government.
After collecting all these documents kindly attach them with the post office savings account application form and submit them to the savings account provider for KYC verification.
4) How to open a post office savings account?
To open a post office savings account follow the below-mentioned steps.
- First visit to the nearby post office where you are going to open the account
- Get the application form for opening a savings account
- Fill in the details with appropriate information. Attach your recent passport size photo and other documents for KYC verification.
- Then you need to make a deposit which should not be lesser than Rs.20. This doesn’t include a cheque book
- If you wish to open your account with a cheque book then your minimum deposit would be Rs.50
- If you are a senior citizen then a separate application form is provided for you
- Internet banking facility of savings account will be done only through online. Visit the official site of India Post. You can enter your customer id when you click on the “New User Registration”
- All these processes get completed within two business days.
You can also download the application form online. Note that only the form can be downloaded online, all other processes should be done offline.

5) How to deposit and withdraw from a post office savings account?
There are certain benefits in depositing and withdrawing the amount from the post office savings account. They are
- The minimum amount to be deposited in the post office savings account is Rs.500
- If you can’t able to make the initial deposit amount of Rs.500 then you can deposit a difference amount. The difference amount is that you can make a payment of less than Rs500. But within one year from the commencement of this scheme your sum of difference amount should be a minimum of Rs.500
- Note that the minimum balance of Rs.50 should be maintained for generic accounts ie). The account without chequebook. The minimum balance of Rs.500 should be maintained in case of an account with chequebook.
- After the account opening, you can make deposits that should not be less than Rs.10
- There are no other limits on the maximum deposit
- You can withdraw the money either through an offline process at the post office or through internet banking, etc…
- If you haven’t make a deposit at a specified date then Rs.100 will be deducted as the account maintenance fee at the end of every financial year. When the account becomes 0 balance after the penalty deduction your account will be closed.
- If you don’t do any transaction ( deposit and withdrawal) using for savings account for 3 years then your account will be treated as a salient account.
- When your account becomes salient you can’t do any transactions. You need to revive your account.
6) What are the post office charges on the savings account?
The post office will charge for specific actions that are listed below.
- For nominating the nominee and debit card charges it is free of cost
- If you don’t satisfy the minimum deposit requirement then you will be charged Rs100
- You can withdraw from ATM without any charges for the first three withdrawals per month. After the third withdrawal, you will be charged Rs.20 for financial activities and Rs.8 for non-financial activities.
- If you do NEFT transactions at the post office, then Rs.2.5 will be charged per transaction up to Rs.10,000. If the transaction is between Rs10,000-Rs1 lakh then you will be charged Rs.5 per transaction
- For UPI payments up to Rs.1 lakh, Rs.4 will be charged as a service fee.
- Rs.50 will be charged for issuing the duplicate cheque book
- Rs.100 will be charged for transferring the account from one branch to another branch
- If you wish to cancel the nomination or to change the nominee Rs.50 will be charged as a service fee
- Rs.100 will be collected in case of cheque dishonor
- Rs.25,000 will be the daily limit for atm withdrawal
These are some of the charges issued by the post office.

7) How are post office interest rates are calculated?
As said earlier Central government decides the interest rates of the post office savings account. At present, the interest rate was 4% and it is calculated every month. The generated income will be credited to the account annually.
8) What are the benefits and features of a post office savings account?
Below mentioned are the features of the post office savings account.
8.1) Features of Savings account
- If you need to convert your single account to a joint account then the KYC verification is done for the second party
- Nominating of the nominee is must while opening the account
- Usage of cash is the only allowed mode of payment while opening the account. No other modes are allowed
- If you got a transfer on your job, then with ease, you can transfer the post office savings account from your opening branch to your designated branch Post office savings account is easy to operate like other savings bank account
- This savings account includes the feature of chequebook, passbook, deposit, and withdrawal of money
- You can’t open more than one savings account in the post office
- You should need to make at least one transaction within the three years to keep your account inactive stage
- The minimum balance depends upon the type of savings account the user chooses. If it is a savings account without chequebook then it will be Rs.50, but with chequebook it will be Rs.500
8.2) Benefits of post office savings account
Following are the benefits of the post office savings scheme
- Post office savings account has less maintenance than savings account in banks.
- With the use of a debit card, you can withdraw money anywhere around the nation
- Even a post office savings account has tax exemption benefits. If the interest earned below is Rs.10,000 then you will be tax-free.
- Other post office schemes like PPF, NSC, and SSY have a certain upper limit for deposition. While in the other hand post office savings account hasn’t any upper limit for deposition
- Though you can’t earn high from posit office saving accounts as compared to PPF, NSC, and SSY accounts. But you can earn a steady income in every aspects
- For a joint account, you can add up to three members for the account
- The interest provided is the same as that of a savings bank account.

Hereby concluding that the post office savings account works best for rural areas as well as the urban areas. As the maintenance and the service charges are quite low than the private banks and public sector banks low-income people find it easy to maintain the savings account. Open the post office savings account and enjoy the benefits.
9) FAQ
Yes, the post office savings account comes with a debit card. The debit card will be issued after 2 to 3 business days from the date of account opening.
There are 2 forms available namely Form1 and Form2 one is for opening the account and the other is for closure of the account.