Post Office Savings Account (POSA) 2026
The base account that links all your post-office schemes.
Rates for July–September 2026 (Q2 FY 2026-27) · Updated 27 September 2026What is Post Office Savings Account (POSA)?
The Post Office Savings Account is a basic deposit account available at more than 1.5 lakh post offices. It pays 4% interest, offers cheque book, ATM card, internet and mobile banking, and is the account into which MIS, SCSS and TD payouts are credited.
POSA at a glance
| Particular | Details |
|---|---|
| Interest rate | 4.0% p.a. |
| Minimum balance | ₹500 |
| Interest calculation | On minimum balance between the 10th and end of month |
| Credit | Annually |
| Services | ATM card, cheque book, e-banking, mobile banking, IPPB link |
| Silent account | No transaction for 3 FYs → silent (revive with KYC) |
Government-notified terms for July–September 2026 (Q2 FY 2026-27). Verify the latest notification before investing.
Features & benefits of POSA
Rural and urban post offices across India.
Receives MIS/SCSS/TD payouts; funds online PPF/SSY/RD deposits.
Up to ₹3,500 (single) / ₹7,000 (joint) under Section 10(15).
Eligibility — who can invest?
- Resident adults (single / joint up to 3)
- Guardian for minors; minor above 10 in own name
- One single account per individual
How does POSA work?
- Open with ₹500.
- Interest calculated monthly on minimum balance between 10th and month-end.
- Maintain ₹500; below this, ₹50 maintenance fee applies.
Tax benefits of POSA
| Stage | Tax treatment |
|---|---|
| Interest | Exempt up to ₹3,500 single / ₹7,000 joint; above that taxable (80TTA/80TTB relief in old regime) |
| TDS | None |
Section 80C of the Income-tax Act, 1961 is Section 123 of the Income-tax Act, 2025 from tax year 2026-27. Deductions apply only in the old tax regime.
Withdrawal, premature closure & maturity rules
| Situation | Rule |
|---|---|
| Withdrawal | Any time; minimum ₹50 withdrawal |
| Balance | Keep ₹500 minimum |
POSA returns — worked examples
| Average balance | Annual interest @4% |
|---|---|
| ₹25,000 | ₹1,000 |
| ₹87,500 | ₹3,500 (exempt limit) |
| ₹2,00,000 | ₹8,000 |
Illustrative, assumes constant balance.
POSA calculator
How to open / invest in POSA
- Visit post office with KYC.
- Fill SB-3 form.
- Deposit ₹500.
- Collect passbook; request ATM card and activate e-banking.
Documents required
- Aadhaar
- PAN
- Photographs
Important forms
| Form | Purpose |
|---|---|
| SB-3 | Account opening |
| SB-7 | Withdrawal |
| SB-103 | Deposit |
| SB-7A | Closure |
Advantages & limitations
- Low minimum balance
- Tax-exempt interest band
- Links all PO schemes
- Low 4% rate
- Branch-centric servicing
Mistakes to avoid
- Letting balance fall below ₹500
- Account going silent due to inactivity
POSA vs other saving schemes
| Scheme | Rate | Tenure | Minimum | Tax |
|---|---|---|---|---|
| POSA | 4.0% p.a. | No fixed tenure | ₹500 opening & minimum balance | Interest exempt up to ₹3,500 (₹7,000 joint) |
| PO RD | 6.7% p.a. | 5 years (extendable by 5 years) | ₹100 per month | Interest taxable |
| POMIS | 7.4% p.a. | 5 years | ₹1,000 | Taxable — no deduction |
| PO TD | 6.9% – 7.5% p.a. | 1, 2, 3 or 5 years | ₹1,000 | 5-year TD qualifies for deduction; interest taxable |
| PMJDY | Savings-bank rate of the bank | No fixed tenure | Zero balance | As savings-account interest |
Frequently asked questions
Is POSA interest tax-free?
Up to ₹3,500 (single) / ₹7,000 (joint) under Section 10(15).
Can I open POSA online?
Through IPPB digital onboarding, or at a post office.
Information is for education and comparison. Interest rates are notified by the Government every quarter and scheme rules can change — confirm with India Post, your bank, EPFO or PFRDA before investing. FinancePortal is not a financial or tax adviser.