Post Office Savings Account Calculator

What Is a Post Office Savings Account Calculator?

A Post Office Savings Account calculator estimates the annual interest you will earn on your account balance at the current interest rate, and shows how much of that interest stays tax-free under the applicable deduction limit.

Current Post Office Savings Account Details

• Interest rate: 4% per annum, calculated on the monthly qualifying balance and credited annually at the end of the financial year.
• Facilities: passbook, ATM-cum-debit card, cheque book, and access through India Post Payments Bank net banking and mobile banking.
• Joint accounts: allowed, along with a nomination facility.

The 10th of the Month Rule

Interest on a Post Office Savings Account is calculated on the lowest balance between the 10th and the last day of each month, and the total for the year is credited once, at the end of the financial year.

Two things follow. First, note the 10th here, not the 5th as in PPF. Second, no interest accrues at all in any month where that qualifying balance falls below ₹500 — not a reduced amount, but nothing.

India Post rounds the annual total to the nearest rupee.

Worked Example

If you maintain a steady balance of ₹50,000 throughout the year:

That is credited in one go at the end of the financial year.

Tax Treatment of Savings Account Interest

Interest earned on a Post Office Savings Account, as well as bank savings accounts, is eligible for a deduction under Section 80TTA up to ₹10,000 a year for individuals below 60. The limit is combined across all your savings accounts, not per account.

Senior citizens can claim a higher deduction of up to ₹50,000 under Section 80TTB, which also covers FD and RD interest, not just savings account interest.

Interest beyond these limits is added to your taxable income and taxed at your slab rate. Both 80TTA and 80TTB are available only under the old tax regime.

Post Office vs Bank Savings Account

Key Takeaways

• A Post Office Savings Account earns 4% per annum, calculated on the monthly qualifying balance and credited annually.
• No interest accrues for any month where the qualifying balance falls below ₹500.
• Interest up to ₹10,000 a year, or ₹50,000 for senior citizens, is deductible under Section 80TTA or 80TTB, combined across all your savings accounts.
• It carries a sovereign guarantee, similar in safety to keeping money in a large public sector bank.