From Savings Account To FD Returns: Know All About Post Office Banking Services

Post office interest rate: Designated post office provide a range of banking services such as government-sponsored small savings schemes.

From Savings Account To FD Returns: Know All About Post Office Banking Services

Post office scheme: Designated post offices provide nine types of government-sponsored savings schemes

India Post offers a range of banking and remittance services to the public, including savings bank accounts (Post Office Savings Account) and fixed deposits (under the Post Office Time Deposit Savings Scheme). One can access nine types of government-sponsored investment/deposit options in the form of small savings schemes at designated post offices. India Post, which operates a network of more than 1.5 lakh post offices across the country, pays interest up to 8.7 per cent per annum on investment in the nine small savings schemes, according to its website - India Post office also provides National Pension System (NPS) (all citizens model) accounts. NPS is a voluntary pension scheme managed by the Pension Fund Regulatory and Development Authority (PFRDA). (Also read: How post office National Pension System (NPS) account works)

Here are some key details about various banking services provided by India Post in designated post offices and its payments bank (IPPB):

Post office savings account interest rates

Deposit in a post office savings account fetches interest at the rate of 4 per cent per annum, according to the India Post website. 

(Also read: Five types of bank accounts one can operate in a post office)

Post office savings account investment/balance requirements

A Post Office Savings Account can be opened against a minimum deposit of Rs 20. For a savings account without subscription to the post office's cheque book facility, a minimum balance of Rs 50 to ensure operability. For subscription to the cheque book facility, the savings account is to be opened with a minimum deposit of Rs 500, and for this purpose, minimum balance of Rs 500 is required to be maintained, according to the post office portal. India Post also provides internet banking services for its savings bank accounts.

India Post Payments Bank savings accounts, current account

India Post Payments Bank (IPPB), which is also operated under the Department of Posts, offers savings and current accounts, money transfer and direct benefit transfer services as well as bill/utility payments.

The India Post payments bank offers three types of savings bank accounts: regular, digital and basic. Among other features, all three types of IPPB savings bank accounts do not require the account holder to maintain any particular balance, meaning the account can be operated with zero balance.

Type of accountInterest rateMinimum amount for opening accountMaximum balance allowed
Post Office Savings Account4% per annumRs 20-
IPPB Regular Savings Account4% per annumNilRs 1 lakh (end of day balance)
IPPB Digital Savings Account4% per annumNilRs 1 lakh (end of day balance)
IPPB Basic Savings Account4% per annumNilRs 1 lakh (end of day balance)
IPPB Current AccountNANilRs 1 lakh (end of day balance)
(Source: India Post, India Post Payments Bank websites)

IPPB, however, requires its current account holders to maintain a monthly average balance - the average of daily balances in a month - of Rs. 1,000, according to the bank's website.

Interest rates applicable to other small savings scheme in a post office

The nine savings schemes at the post office offer interest rates in the range of 7 per cent to 8.7 per cent.

Small savings schemeInterest rate
Post Office Savings Account4%
National Savings Recurring Deposit Account7.3%
National Savings Time Deposit Account7-7.8%
National Savings Monthly Income Account7.3%
Senior Citizens Savings Scheme8.7%
Public Provident Fund8%
National Savings Certificates8%
Kisan Vikas Patra7.7%
Sukanya Samriddhi8.5%
(Source: India Post website)
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A comparison of lock-in periods and investment limits applicable to small savings scheme accounts in a post office

Savings schemeMaturity periodInvestment limit
Post Office Savings Account-Minimum Rs. 20 for opening account
National Savings Recurring Deposit Account5 yearsMinimum Rs. 10 per month, no maximum limit
National Savings Time Deposit Account1/2/3/5 yearsMinimum Rs. 200, no maximum limit
National Savings Monthly Income Account5 yearsRs. 1,500 - Rs. 4.5 lakh in single account/Rs. 9 lakh in joint account
Senior Citizens Savings Scheme5 yearsRs. 1,000 - Rs. 15 lakh
Public Provident Fund15 yearsRs. 500 - Rs. 1.5 lakh per financial year
National Savings Certificates5 yearsMinimum Rs. 100, no maximum limit
Kisan Vikas Patra2.5 yearsMinimum Rs. 1,000, no maximum limit
Sukanya Samriddhi-Rs. 1,000 - Rs. 1.5 lakh per financial year
(Source: India Post website)

The savings schemes of Time Deposit, Recurring Deposit, Monthly Income, Senior Citizens, PPF, NSC and Kisan Vikas Patra come with a lock-in period - also known as maturity period - of one year to 15 years, according to the India Post website.

Post office certificate-based investment schemes

One can set up a variety of bank accounts at the post office. Out of the nine small savings schemes, Kisan Vikas Patra and National Savings Certificate (NSC) are certificate-based investment schemes. 

Post office savings schemes income tax benefits

Investment in three of these small savings schemes offered by the post office is eligible for a deduction in taxable individual income up to Rs. 1.5 lakh in a financial year under Section 80C of the Income Tax Act. These post office schemes are: National Savings Time Deposit (five years), Public Provident Fund (15-year) and Senior Citizen Savings Scheme.

(Also read: Investment choices available under NPS explained)

NPS account in a post office

National Pension System (NPS) enables the subscriber to set his or her own choice for fund allocation to different asset classes, such as government securities, equity market instruments, corporate debt and alternative investment office bank account, post office interest rate, post office interest rate, post office deposit, post office deposit limit, post office deposit interest rate, post office deposit return, post office interest rate on deposit, post office account balance, post office minimum balance, post office deposit limit, post office investment limitInvestment in NPS (all citizen model) is eligible for an additional tax benefit up to Rs.50,000 in a financial year, according to the post office website. 

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