Know about Post Office Saving Account Interest Rate

As we know that India Post is the largest department that has a huge network of post offices in India. These post offices are also working in rural areas as well as urban areas. People of India also believe in these post offices that their money is safe in the post office and will be safe in the future also. Hence every person wants to open an account in the post office. This account is called Post Office Savings Account (POSB).

Post Office Savings Account Interest Rate

Actually, the central government of India decides the post office savings account interest rate of post offices. Mostly post office savings rates is the same as interest rate in bank accounts.

Interest will be calculated on the basis of the minimum balance between the 10th of the month and the end of the month and allowed in whole rupees only. No interest will be allowed in a month if the balance between the 10th and the last day of the month falls below Rs. 500.

Interest shall be credited in the account at the end of each Financial Year at the interest rate prescribed by the Ministry of Finance. At the time of closure of Post Office Savings Account, interest will be paid up to the preceding month in which the account is closed. 

Under section 80TTA of the Income Tax Act, from all Post Office Savings Bank Accounts, interest up to Rs. 10,000 earned in a Financial Year is exempted from taxable income.

post office saving account interest rate 2020

As per the latest order of the Department of Posts, interest rates of Post Office Savings Account is 4.0% per annum on individual/joint accounts. Post office SB account interest rate is decided by the Ministry of Finance.