The recurring deposit scheme offered by India Post is a popular option in India as it provides people with a solution to problems related to their monetary savings, while helping them earn money by giving them high rates of interest on their deposits.
Through this recurring deposit scheme, India Post offers its customers an Interest Rate of 7.4 Percent Per Annum on Their Deposits which can be made for a Minimum Tenure of 5 Years. This deposit can be extended for an additional 5 years on a yearly basis with the interest on it being Compounded Quarterly.
People can deposit a minimum of Rs.10 in their India Post RD accounts or in multiples of Rs.5. There is no maximum limit on the amount they can deposit in their RD accounts.
An India Post recurring deposit account can be opened at any post office through a cheque or by paying cash. The deposits have to be made by the 15th day of every month, if the RD account is opened anytime up to the 15th of a particular month. If the account has been opened anytime from the 16th day to the last working day of a particular month, the deposits have to be made by the last working day of the month.
In case a depositor fails to deposit money on time, a default fee of 5 paisa is charged on every Rs.5, while four back to back defaults will get the account discontinued. Depositors of this RD account are allowed one withdrawal after 1 year of up to 50 percent of the balance in their account.
Apart from the above, India Post recurring deposit customers are entitled to a rebate, if they deposit the amount for at least 6 installments in advance. In case of the depositor’s death, the value of the full maturity is permitted on recurring deposit accounts, which is restricted to an amount in denominations of Rs.50.
More you need to know about Recurring Deposit
- Compare Recurring Deposit Interest Rate of Post Office with Other Banks and Institutions
- Check Features and Schemes of Post Office Recurring Deposit
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Post Office Recurring Deposit Schemes Project Higher Returns
It has been noted that recurring deposit schemes introduced by post offices in India yield higher return on investment (ROI), compared to those held in Banks. The monetary policy has hinted that the reason behind this hike in savings is due to the higher rate of interest applied on these term deposit schemes. It has also been noted that the schemes such as the Public Provident Fund and National Savings Certificate scheme introduced by the government, have higher returns than post office deposits. Keeping this in mind the Government has indicated that there would be a change in interest rates after the policy review in September, with the purpose of linking these interest rates to the prevalent market rates.
02nd December 2015