Difference Between LIC and Post Office Recurring Deposit

A Recurring Deposit is a financial instrument through which individuals can deposit a fixed amount of money every month for a fixed period of time. The money deposited would accrue interest over the time period of the deposit, and the interest would be payable over a monthly, annual or end of maturity basis.

A Recurring Deposit or RD, as it is commonly known as, is a good alternative for those who do not have a large amount of capital to invest in a Fixed Deposit. As compared to a Fixed Deposit, which requires a one-time deposit of a sum not less than Rs. 10, 000, RD allows for a minimum deposit of Rs. 500, with each subsequent deposit made to be in multiples of 100.

In this way, an RD allows for individuals to be able to budget as well as save for the future. A Recurring Deposit also pays out the same rate of interest as a Fixed Deposit, depending on the tenure of the deposit.

An RD can be for tenures ranging from 6 months to a maximum of 10 years.

The LIC or Life Insurance Corporation of India is a company that was instituted in the year 1956 with the aim of providing life insurance policies to the Indian people. The company is now the largest provider of life insurance in India, with assets worth over $ 230 billion.

The Post Office, also known as India Post, was set up in the year 1774 by the British Empire. With a network spanning the length and breadth of the country, the Post Office runs services that include letters, parcels as well as financial services like the Public Provident Fund, life insurance and savings accounts and recurring deposits.

LIC Recurring Deposit

The LIC Recurring Deposit scheme is a financial tool that enables individuals to save money and earn from their savings. The LIC RD is known as the Jeevan Saral plan and is a recurring deposit plan that allows individuals to deposit a sum of money either monthly, quarterly, half-yearly or annually for a fixed duration, on which they will receive a pre-determined interest.

Individuals who wish to invest in the LIC Jeevan Saral can do so by opening an account with the LIC, after which they can select the tenure of their deposit. This can range between a minimum tenure of 10 years and a maximum of 35 years.

This is a long term deposit plan that offers individuals attractive rates of interest, as well as the chance to decide the premium amount. If the individual survives till the deposit matures, he stands to receive 250 times the deposit, which is the maturity sum along with loyalty additions. In case the investor passes away before maturity of the term, a guaranteed return of investment of 250 times the initial amount deposited will be transferred to his heirs.

Individuals investing in the scheme also stand to benefit from income tax exemptions, as the premium amount as well as the amount deposited is exempted from income tax under Section 80c.

The LIC Jeevan Saral scheme has another advantage in that it is auto renewed. If an individual forgets to claim the premium upon maturity, the scheme is renewed for an additional 10 years, and he will receive additional premium over the extended period of time.

The financial future of family members can be safeguarded from an early age through this scheme, as the minimum age for depositors is 12 years of age.

Elderly investors stand to receive an additional amount as premium, with the minimum amount received as premium guaranteed being Rs. 400 a month.

In case the individual wishes to opt out of the scheme, he may do so partially after a period of 3 years from the commencement of the scheme.

To incentivize investors to invest in long term policies, LIC offers a loyalty addition bonus for every year above a 10 year deposit tenure. This amount will be handed over to the investor upon maturity of the deposit.

Post Office Recurring Deposit

The Post Office Recurring Deposit scheme is a 5 year RD scheme. Under this, investors stand to receive a guaranteed sum assured upon maturity of the premium deposited over the term.

The Post Office Recurring Deposit scheme allows investors to make an initial deposit of Rs. 10/- and subsequent deposits in multiples of 5, with Rs. 10/- being the minimum amount. The deposits have to be made on a monthly basis, with the deposits accruing interest at the rate of a Foxed Deposit scheme.

Investors who choose to would like to invest in the Post Office’s RD scheme can open as many accounts as they desire at any of the post offices in the country. Individuals can also open accounts in the names of minors, with the minimum age for opening an RD based account being 10 years.

Upon maturity, the investor will receive a Sum Assured along with the interest for the period, i.e 5 years.

Investors can also choose to open a joint account for their Post Office RD schemes, and can choose to transfer these accounts to any post office within the country.

Comparison Between LIC Recurring Deposit and Post Office Recurring Deposit

Given below are the differences between the Life Insurance Corporation’s recurring Deposit and the Post Office Recurring Deposit scheme:

  LIC RD Post Office RD
Tenure Up to 35 years Up to 5 years
Minimum amount Rs. 250 Rs. 10
Subsequent premium amount Multiples of Rs. 50 Multiples of Rs. 5
Loan against policy Available Not available
Rate of interest Not guaranteed- loyalty addition provided 8.4% per annum, with interest compounded per quarter
Tax benefit Yes, under Section 80c up to Rs. 1, 00, 000 (premium amount) No benefit
Premature Surrender Yes, 80% of Monthly Sum Assured after 3rd year, 90% after 5th year Yes, but interest penalty charged
Recurring Deposit - Sitemap

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Display of any trademarks, tradenames, logos and other subject matters of intellectual property belong to their respective intellectual property owners. Display of such IP along with the related product information does not imply BankBazaar's partnership with the owner of the Intellectual Property or issuer/manufacturer of such products.

Display of any trademarks, tradenames, logos and other subject matters of intellectual property belong to their respective intellectual property owners. Display of such IP along with the related product information does not imply BankBazaar's partnership with the owner of the Intellectual Property or issuer/manufacturer of such products.

Customer Reviews

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  • ICICI Bank Saving Account
    "Excellent "
    ICICI BANK
    0.5 5.0/5 "Blown Away!"
    The bank experience is good and they are providing transparent information. I am getting proper alert messages while doing transaction , In case if they take any charges also they provide proper information and details from bank end. Overall good and easy.
    Was this review helpful? 0
    , chennai
    Reviewed on Apr 24, 2019
  • review Other Loan
    "Very good"
    PAYTM PAYMENTS BANK LTD
    0.5 4.0/5 "Great!"
    The services which has been provided through this paytm is fine. It is good service . Mostly i use this services for shopping, traveling. Booking tickets I have been using PAYTYM services three month back. Customer service i have interacted with them till date but I did not got cash back still now ,
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    , new delhi
    Reviewed on Apr 24, 2019
  • ICICI Bank Saving Account
    "Good"
    ICICI BANK
    0.5 3.0/5 "Satisfactory"
    I have ICICI bank this is saving account last four years , and I never face any problem any in this bank,and their net-banking and mobile banking is also good , but never call is going customer care , this service is not good , and here is maintain 1k ,
    Was this review helpful? 0
    , new delhi
    Reviewed on Apr 24, 2019
  • SBI Saving Account
    "Very good"
    STATE BANK OF INDIA
    0.5 4.0/5 "Great!"
    This is my saving account and company NEFT my state bank of India bank , last two years I have this account , here I maintain 5k, and their customer service is good , but nothing offer provide , and I am satisfied with state bank of India and their service ,
    Was this review helpful? 1
    , new delhi
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  • Bank Bazaar Credit Card
    "Got my free credit card through Bank bazaar"
    YES BANK
    0.5 5.0/5 "Blown Away!"
    I got my new credit card from Bank bazaar based on my credit score . When I am checking free credit score in their portal , I got a call from the sales team . Based on my score there was a life time free card is available . Then I decided to go with this card .
    Was this review helpful? 0
    , coimbatore
    Reviewed on Apr 24, 2019
  • Bank Bazaar Credit Card
    "Excellent service"
    HDFC BANK
    0.5 5.0/5 "Blown Away!"
    I have been using bank bazaar service for first time, i came to know about this bank bazaar service through on line,i am happy with their service and i have applied for credit card from them, i have not faced any issue or difficulty in that getting my credit card, whole process when smoothly and i have used mobile application it is easy to access.
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    , new delhi
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  • Axis Bank Personal Loan
    "Good"
    AXIS BANK
    0.5 4.0/5 "Great!"
    From AXIS bank I took personal loan, the experience was good and they taken processing fee it was nominal.The customer service was supportive in terms of loan process and i got the loan on time. The rate of interest is nominal. I am fine with loan experience.
    Was this review helpful? 0
    , chennai
    Reviewed on Apr 24, 2019
  • Punjab National Bank Credit Card
    "Good"
    PUNJAB NATIONAL BANK
    0.5 3.0/5 "Satisfactory"
    I have one more credit card last two years from punjab national bank , this is free card , but I am not satisfied with credit limit just 10k after using 1.6years then increase only 10k , now credit limit is 20k , and their customer service is good ,
    Was this review helpful? 0
    , new delhi
    Reviewed on Apr 24, 2019
  • RBL Bank Credit Card
    "Very good"
    RATNAKAR BANK
    0.5 4.0/5 "Great!"
    Their customer service is not good I try but every time call is not going , I have taken one RBL credit card here is credit limit is 45k not much happy ,last one years I have this credit card , I am not getting any offer , and I dont know this is charges or free , but I am satisfied with this credit card ,
    Was this review helpful? 0
    , new delhi
    Reviewed on Apr 24, 2019
  • review Other Loan
    "Very good"
    INDIABULLS
    0.5 4.0/5 "Great!"
    India bulls is instant approval , I took only 3k last 2month back emi is 1k and tenure is 3 month no any processing fee and no any rate of interest , I like this type of loan , and I am happy this loan when need instant got amount , never any problem I know last 5 years this service ,
    Was this review helpful? 0
    , new delhi
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  • HDFC Bank Credit Card
    "Average card"
    HDFC BANK
    0.5 3.0/5 "Satisfactory"
    I have been applied for HDFC BUSINESS MONEYBACK credit card for recently, they have not charged me annual fee as it is life time free credit card, the credit limit which they have given to me was okay, the card came on time there was no delay or issue in getting card.
    Was this review helpful? 0
    , new delhi
    Reviewed on Apr 24, 2019
  • YES Bank Credit Card
    "Not upto the expectation"
    YES BANK
    0.5 3.0/5 "Satisfactory"
    Yes bank has not given me the expected credit limit when I was promised before buying this credit card . I am not received any promotional offers for this card . But the executive has given big hype about having and using this card . There will be huge credit limit and so many offers will be available .
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    , coimbatore
    Reviewed on Apr 24, 2019
  • review Personal Loan
    "Not satisfied"
    HOME CREDIT INDIA FINANCE PRIVATE LTD
    0.5 1.0/5 "Really Bad"
    My loan is approval 1.50L but I take only 25K from home credit , because rate if interest is very high I took this loan emergency purpose , and tenure is 12 month last 1 month back I took this loan , EMI amount is 2649K , after 4 month I want closed this loan , I am not satisfied this personal loan ,
    Was this review helpful? 0
    , new delhi
    Reviewed on Apr 24, 2019
  • Bank Bazaar Personal Loan
    "Average"
    UJJIVAN SMALL FINANCE BANK LTD
    0.5 3.5/5 "Pretty good"
    I know bank bazaar last three years , and their customer service is good and response is also good , but I want gave one suggest if my customer is ability good bank offer provided and no much time take documentary process , but I am satisfied with bank bazaar,
    Was this review helpful? 0
    , new delhi
    Reviewed on Apr 24, 2019
  • ICICI Bank Saving Account
    "Excellent Service"
    ICICI BANK
    0.5 5.0/5 "Blown Away!"
    I am using the ICICI Bank Savings account for the last three to four years, the services from the branch had been good. There has to be a minimum balance of 5000 which has to be maintained with this account and i am using the account for my day to day transactions. They had been taking some small charges for the banking services.
    Was this review helpful? 0
    , new delhi
    Reviewed on Apr 24, 2019
  • ICICI Bank Personal Loan
    "Good Experience"
    ICICI BANK
    0.5 4.0/5 "Great!"
    I have personal loan with ICICI bank, the experience was good. As per my expectation the rate of interest was 11% , the processing fee is normal, while applying the loan customer service was supportive in terms of loan process. I am fine with loan experience.
    Was this review helpful? 0
    , chennai
    Reviewed on Apr 24, 2019
  • Bank Bazaar Credit Card
    "Average service"
    AMERICAN EXPRESS BANKING CORPORATION
    0.5 3.0/5 "Satisfactory"
    I came to know about bank bazaar service through on line, this is my first time i have been availing their service, their website is good, but one thing i would like to suggest them is that stop doing too much of spamming call, i use to get too much of call from them.
    Was this review helpful? 0
    , bangalore
    Reviewed on Apr 24, 2019
  • review All Products
    "Not satisfied"
    UJJIVAN SMALL FINANCE BANK LTD
    0.5 2.0/5 "Expected more"
    If I visit branch then I know about my personal loan , I want to take loan 4to 5L but customer service told me 1L provided and rate of interest is very high so I did not take UJJIVAN small finance personal loan ,so I did not take this personal loan ,
    Was this review helpful? 0
    , new delhi
    Reviewed on Apr 24, 2019
  • review Saving Account
    "Good service"
    YES BANK
    0.5 3.0/5 "Satisfactory"
    I am using the YES BANK Savings account for the last two to three months where the services of them has been good. It has been my salary account where i had not been using it for regular transactions. The Internet banking and mobile banking services of them has been good as well. There hasn't been any hassle faced with the banking services of them.
    Was this review helpful? 0
    , new delhi
    Reviewed on Apr 24, 2019
  • SBI Education Loan
    "Very Good Service"
    STATE BANK OF INDIA
    0.5 4.0/5 "Great!"
    I had taken an Educational Loan from STATE BANK OF INDIA a long time back and the experience had been good. The process in getting the loan did not took much time. The loan amount has been as per the expectations, and the interest rate with them had been nominal. The services from the branch and the response has been pretty good.
    Was this review helpful? 0
    , new delhi
    Reviewed on Apr 24, 2019
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