India Post offers it’s customers the facility of a 5-Year Recurring Deposit (RD) Account which is essentially a deposit scheme allowing customers to add to their savings by investing money which earns interest over a fixed period of time. An RD is usually opened for a fixed period of time and deposits must be made at predetermined intervals which may be monthly, quarterly, depending on the terms and conditions of the deposit scheme. Unlike a fixed deposit, an RD is not a one-time investment and may be closed before its maturity date. The India Post Recurring Deposit Account is an ideal investment option for first time investors or young professionals as it does not require customers to invest large sums of money towards installments but does earn you handsome interest at the end of the maturity period.
Features of Post Office Recurring Deposit
- Customers can open an RD Account with a minimum of Rs 10/- per month or any amount in multiples of Rs 5/-. There is no maximum limit on the amount one may wish to invest each month.
- You can open an RD Account by paying in cash or by cheque. In case payment is made by cheque, the date of presentation of the cheque will be considered as the date of deposit.
- Customers can avail the Nomination facility not only at the time of opening the account but also afterwards.
- You can transfer your Recurring Deposit Account from one post office to another.
- Customers are free to open any number of RD Accounts in any Post Office of their choice.
- Customers making an advance deposit for at least 6 months are entitled to a rebate.
- Customers have the option of converting a Single account to a Joint account and vice versa.
- If the RD Account has been opened by the 15th of a month, then the subsequent deposit to the same can be made up to the 15th of the month. If the account has been opened after the 16th of the month, up to the last day of the month, then the subsequent deposit can also be made up to the last working day of the month.
- After attaining majority, a minor must apply for converting the RD account in their name.
- Customers are allowed one withdrawal of up to 50% of the account balance after one year of opening the account.
- Any delay in deposits will attract a default fee at the rate of 5 paise for every Rs 5 of the deposit amount. If a customer defaults on deposit payments for 4 consecutive times, the account shall be discontinued and can be revived in a period of 2 months. However, if the account is not revived, then no further deposit can be made.
Know more about Recurring Deposit
Post Office RD Eligibility
- Recurring Deposit Accounts can be opened by individuals as single or as joint accounts.
- An RD Account can be opened in the name of a minor. Minor individuals aged 10 years and above can open and operate their RD accounts.
Post Office RD Interest Rate
This RD scheme offers a Post Office RD Interest Rate of 6.90% per annum which is compounded quarterly.
Post Office Recurring Deposit (RD) Online Payment
Currently there is no way that post office RD online payment can be carried out from the account holder’s end except through ECS. You can use Electronic Clearing Service (ECS) to ensure that your deposits are paid. However, if you have an agent, he or she can conduct the post office recurring account online payment on your behalf. This is possible through the post office agent portal.
Premature Withdrawal of Recurring Deposit (RD) in Post Office
There could be instances where an individual is cash-strapped and in dire need of money. While it is not recommended to close an RD before its maturity, there is a provision for premature withdrawal of the amount in an RD. Listed below are the important points associated with the premature withdrawal of an RD.
- Premature withdrawal is permitted only after an account has been active for a minimum of 1 year.
- A minimum of 12 monthly deposits should have been made into the account before premature withdrawal is permitted.
- Only one withdrawal is permitted if the above conditions are satisfied. The quantum of such withdrawal should not be more than 50% of all deposits until said time.
- Withdrawal amount can be in multiples of Rs.5.
- Amount withdrawn should be repaid, either as a single lump sum amount or through EMIs.
- Interest should be paid by the individual on the amount withdrawn.
- Amount withdrawn needs to be repaid, with interest, before the RD matures.
About Post Office RD
Commonly referred to as the ‘post office’, the Department of Post, also known as India Post, is the government operated postal system of India. Founded all the way back in 1774, India Post is a part of the Ministry of Communications and Information Technology and offers multiple services to the Indian population like letter post, parcel service, EMS (Enterprise Messaging System), delivery, freight forwarding, third party logistics, insurance, deposit accounts and more.
Post Office Recurring Deposit FAQs
- How much can I invest in a Post Office recurring deposit?
- Are Post office RDs tax-free?
- Is the facility of premature withdrawal available on Post Office recurring deposits?
- Can an RD account be opened in the name of a minor at the post office?
- Does Post office offer any kind of rebate?
For opening a recurring deposit account with the Post Office, the minimum amount is Rs.100 per amount or any amount in multiples of Rs.10. There is no cap on the maximum amount that you can invest.
Yes, they are tax free given that it has a tenure of 5 years.
The facility of premature withdrawal is available. However, premature withdrawal is allowed after 3 years from the date of opening the account
Yes, an RD account in the name of a minor can be opened. The minor should be above 10 years of age.
If you make advance deposit of at least 6 months, post office shall offer you a rebate. Rebate will be paid for denomination of Rs.100.
RD Interest Rate Pages
- United Bank RD Interest Rates
- Uco Bank RD Interest Rates
- Allahabad Bank RD Interest Rates
- Central Bank RD Interest Rates
- Federal Bank RD Interest Rates
- Indian Bank RD Interest Rates
- Andhra Bank RD Interest Rates
- Kotak Mahindra RD Interest Rates
- Syndicate Bank RD Interest Rates
- IOB RD Interest Rates
- City Union Bank RD Interest Rates
- Citybank RD Interest Rates
- Indusind Bank RD Interest Rates
- Corporation Bank RD Interest Rates
- BOM RD Interest Rates
RD Other Pages
- Recurring Deposit Vs. Chit Fund
- Miss to Pay the Recurring Deposit Due
- Difference Between Recurring Deposit and SIP
- Open RD Account through HDFC NetBanking
- RD Account in SBI
- Advantages of Recurring Deposit
- Flexi RD
- SBI Flexi RD Schemes
- Monthly Recurring Deposit
- Co-operative Bank Recurring Deposit
- City Union Bank Recurring Deposit
- Indian Bank Recurring Deposit
- Union Bank Recurring Deposit
- UCO Bank Recurring Deposit