Post Office Small Savings Schemes are very popular among people who want to invest their money in the Govt. run instruments. These financial instruments provide you secure investment options with guaranteed returns. In India, Post Offices have a larger reach compared to any other financial product. So in remote places, they play the key role to penetrate financial inclusion.
Features of Post Office Savings Account
- You can open an account by cash only
- One account can be opened in one post office
- The account can be transferred from one post office to another
- Nomination facility is available at the time of opening as well as after opening of account.
- You can take the cheque facility at the time of opening or later on
- A minor of 10 years and above age can open and operate an account along with a guardian
- Joint account can be opened by two or three adults
- A single account can be converted to joint account and vice versa
- To keep an account active, it is mandatory that you perform atleast one transaction in three financial years
- After reaching the age of 18, the minor has to apply for conversion of the account in his/her name.
- Deposits and withdrawals can be done through any electronic mode in CBS Post offices.
- Inter Post office transactions can be done between CBS post offices.
- CBS Post Offices can grant ATM/Debit cards to all those account holders who have maintained the prescribed minimum balance on the day of issue of card
Post Office Interest Rates Table 2019
Government has recently announced the interest rates for PPF, NSC, KVP and Sukanya Samriddhi for the FY 2018-19. And the post office interest rates 2019 are effective from 1st January onwards. Except the Senior Citizens Saving Scheme and Savings Account interest rates, Government has reduced around 0.2% (20 BPS) for all the schemes.
| Scheme | Interest Rates 2018-19 | Minimum Deposit | Investment Period |
| Savings Deposit (SD) | 4.0% | Rs. 20 | NA |
| 1 Year Time Deposit (TD) | 7% | Rs. 200 | 1 Year |
| 2 Year Time Deposit (TD) | 7% | Rs. 200 | 2 Years |
| 3 Year Time Deposit (TD) | 7% | Rs. 200 | 3 Years |
| 5 Year Time Deposit (TD) | 7.8% | Rs. 200 | 5 Years |
| 5 Year Recurring Deposit (RD) | 7.3% | Rs. 10/ Month | 1 to 10 Years |
| Senior Citizens Savings Scheme (SCSS) | 8.7% | Rs. 1000 | 5 Years |
| Monthly Income Scheme (MIS) | 7.3% | Rs. 1500 | 5 Years |
| 15 Year Public Provident Fund (PPF) | 8% | Rs. 500 | 15 Years |
| National Savings Certificate (NSC) | 8% | Rs. 100 | 5 or 10 Years |
| Kisan Vikas Patra (KVP) | 7.7% | Rs. 1000 | 9 Years 5 Months |
| Sukanya Samriddhi Account Scheme (SSAS) | 8.5% | Rs. 1000 | 21 Years |
Post Office Saving Scheme for Tax Benefit
5 out of above schemes offer tax benefits under section 80C. They are Public Provident Fund (PPF), Sukanya Samriddhi Account (SSA), National Savings Certificate (NSC), Senior Citizens Savings Scheme (SCSS) and Time Deposit Scemes.
Previously, the post office savings interest rates were fixed for many years. However, after 2011 the rates on post office investment are linked to the rates on government securities (G-Secs) of similar maturity. They are reviewed on yearly basis and Govt. of India fixes these rates on every year March.
There is another topic that needs to be covered here. That is India Post Payment Bank or IPPB.
IPPB (India Post Payment Bank)
IPPB or India Post Payments Bank is the recently launched Public Sector Bank under the Department of Posts with 100% GOI equity. It is aimed to efficient banking services to every. The first two India post payment bank branches were inaugurated at Raipur and Ranchi. IPPB is offering savings account up to a balance of Rs 1 Lakh. The IPPB interest rates are as follows:
- 4.5% interest on deposits up to Rs 25,000
- 5% interest on deposits up to Rs 50,000.
- 5.5% interest for deposits between Rs 50,000 to Rs 1 lakhs
India Post Payment Bank will soon it provide current accounts and access to third party financial services like insurance, mutual funds, pension, credit products, forex etc. Digitally enabled payments like mobile, UPI, debit cards along with remittance services of all kinds will be there too. One can use the IPPB debit card at ATMs, PoS and mobile-PoS.
IPPB bank offers 4 types of services namely, Banking Services for Everybody, Domestic Remittance Services, Direct Benefit Transfer (DBT) and Doorstep Banking. There are three types of IPPB accounts under Banking Services for Everybody. They are designed to suit the need of every Indian. The 3 accounts are:
- Regular Account – Safal
- Basic Savings Bank Deposit Account (BSBDA) – Sugam
- BSBDA Small – Saral
The Saral Account is suited for people with limited banking experience whereas the Safal Account is loaded with features.
Post Office Savings Scheme FAQ
How to open an account in post office?
You can open an account at any post office with a minimum balance. To do that, simply visit you nearest post office with the needed documents and complete the formalities. The lock-in or maturity period for different post office savings scheme are different, however, there is none for a savings bank account.
To open an account like Savings Bank (SB), Recurring Deposit (RD), Time Deposit (TD) or Monthly Income Scheme (MIS), you will need the SB3 and SB103 (pay-in-slip). Separate forms are there for senior citizen accounts. For SB account introduction is compulsory. Also, specimen signature slip is required for SB and TD. You can follow the below steps to open an account.
- Go to your nearest or preferred post office, where you want to open an account
- Ask for the post office saving account opening form. Post office savings account online opening is not yet possible, however, you can download the form online from
- Senior citizens have to use separate forms for post office account opening
- Fill in the form with all the needed details and submit it with the required documents
- The minimum amount varies for different post office saving schemes. Pay the initial amount that you want to deposit in your account
- Once your account is opened, you will be given the passbook
What are the rules for premature closure?
| Premature closure for different PO accounts | |
| SB | Can be closed at any time |
| RD | Premature closure permissible after 3 years – only SB rate is permissible |
| TD | Premature closure permissible after 6 months |
| MIS | Premature closure permissible after 1 year |
| Senior Citizen | Premature closure after 1 year |
| PPF | Premature closure after 5 years on account of serious ailment/ to fund higher education |
| NSC (VIII Issue) | Premature encashment is possible only in case of death, court order or forfeiture by a pledgee |
