Post Office Savings Account (POSA) interest rate for October-December 2026

The Post Office Savings Account will continue to earn 4% for October-December 2026 quarter, with the Finance Ministry on Wednesday leaving the rate untouched along with every other small savings schemes.

The decision was entirely on the expected lines. The savings account rate has stood at 4% for well over a decade, through a pandemic, a full rate-hiking cycle and the RBI's four rate cuts in 2025.

All small savings rates for October-December 2026

POSA scheme details

A Post Office Savings Account can be opened with ₹500, which is also the minimum balance to maintain. Interest is paid at 4% per annum and calculated annually, and a cheque book is available to accountholders. There is no TDS on the interest.

However, savers can claim a deduction of up to ₹10,000 a year on savings interest under Section 80TTA, or up to ₹50,000 for senior citizens under Section 80TTB, under the old tax regime.

On every ₹10,000 held under POSA, the account earns ₹400 a year.

POSA is a floating-rate instrument. Meaning, if the rate ever changes, every existing balance re-rates from the following quarter. Most large banks currently pay 2.5-3.5% on savings accounts, so the post office's 4% is slightly better than the typical bank rate.

However, money that sits idle in it earns less than half of what the same money earns can earn in time deposits paying 6.9-7.5%, RDs paying 6.7% or the SCSS paying 8.2% for those above 60.