National Savings Recurring Deposit

1. Flexible Deposits: Start saving with as little as Rs.10 per month, with no upper limit on deposits. 

1. Partial Withdrawal: Withdraw up to 50% of the balance after one year in case of emergencies. 

1. Nomination Facility: The nomination facility is available at the time of account opening and can be updated later if needed 

1. Advance Deposit Rebate: Enjoy rebates when making advance deposits for 6 or more months. 

1. Loan Facility: Use your deposit balance as collateral to secure loans when needed. 

1. Ease of Access: Open and manage accounts easily at any post office nationwide; accounts are transferable. 

1. Short-Term Planning: Fixed 5-year maturity, extendable by another 5 years, suitable for medium-term goals. 

1. Market-Independent: Immune to market fluctuations, ensuring stable and consistent returns. 

Eligibility Criteria for National Savings Recurring Deposit Account (NSRD) 

The following are eligible for opening a National Savings Recurring Deposit Account:  

1. Any individual adult can easily open an NSRD account. 

1. Minors aged 10 years or older can open their own NSRD account, giving them a head start on savings. 

1. An individual can open multiple NSRD accounts, either individually or jointly with another individual. Up to two adults can jointly open an account, making it suitable for partners or family members. 

1. A guardian can open an account on behalf of a minor, providing a secure savings option for children. A guardian can open an account for an individual with a mental illness, ensuring financial security for those in need. 

1. Eligible individuals must submit Form-1 to the accounts office in order to open an account. 

Features of the National Savings Recurring Deposit (NSRD) 

The features of the National Savings Recurring Deposit (NSRD) are as follows: 

1. Eligibility: Any Indian adult can open a National Savings Recurring Deposit account. This makes it accessible to a wide range of individuals. 

1. Fixed Maturity Period: The NSRD has a fixed maturity period of 5 years. The deposit matures at the end of this period. 

1. Interest Rate: The interest rate for NSRD is set by the government and reviewed quarterly, but it is not influenced by market conditions. It remains a fixed rate determined by the government, providing stable returns. 

1. Low Minimum Deposit: The account can be opened with Rs.100. There is no upper limit on deposits. 

1. Partial Withdrawal Option: Depositors can withdraw part of their balance before maturity. There are terms and conditions for such withdrawals. For example: Partial withdrawals are only allowed after one year and can be up to 50% of the balance. 

National Savings Recurring Deposit: Monthly Deposit Requirements 

1. Minimum Monthly Deposit: The account holder must make a minimum of 60 deposits each month, with each deposit being at least Rs.100 or any amount in multiples of Rs.10. 

1. First Monthly Deposit: The first deposit should be made at the time of opening the account. The amount must match the denomination of the account. 

1. Deposit Timelines Based on Account Opening Date: 

• If the account is opened before the 16th of the month, subsequent deposits must be made on or before the 15th of each month. 
• If the account is opened between the 16th and the end of the month, the first deposit must be made by the last working day of the month, with future deposits continuing until the 15th of each month. 

Account Defaults and Revival Process 

1. Consequences of Default: If the account holder misses more than 4 monthly deposits, the account will be treated as discontinued. 

1. Reviving a Discontinued Account: The account can be revived within 2 months from the date of the fourth default. A revival fee will be charged at the rate of Rs.1 for every Rs.100 of the missed instalment for each month of default. The fee must be paid along with the overdue deposit in a lump sum. 

Advance Deposits and Rebate Benefits 

1. Making Advance Deposits: If there are no defaults, account holders can make advance deposits in any month, earning a rebate on the same. Advance deposits can be made at any time, either at the time of opening the account or afterward. 

1. Rebate on Six or More Advance Deposits: 

• Rebate on advance deposit of at least 6 instalments (inclusive of the deposit month).  
• For deposits of Rs.100, depositors receive a Rs.10 rebate for 6 months or a Rs.40 rebate for 12 months. 

1. Rebate Eligibility: No rebate is allowed if advance deposits are made for less than 6 months. The rebate can be given whether the deposits are made in a lump sum or separately. 

1. Rebate Payment: If advance deposits are made on different dates, the rebate is paid at the time of the advance deposit for six or more months. 

Premature Closure of National Savings Recurring Deposit 

1. Conditions for Premature Closure: The account holder may apply for premature closure of their NSRD after 3 years with the interest rate applicable to the Post Office Savings Account. 

1. Form Submission for Closure: To close the account prematurely, the account holder must submit Form-2 to the accounts office. 

1. Advance Deposit Requirement for Closure: No premature closure will be allowed until the period for which advance deposits have been made is fulfilled. 

Maturity of National Savings Recurring Deposit 

1. Premature Withdrawal: After one year, the account holder can withdraw up to 50% of the account balance before maturity. 

1. Maturity Value in Case of Death: In the event of the depositor's death, the maturity value for RD accounts is limited to Rs.50 denomination, subject to certain conditions. 

1. Maturity Period of 5 Years: Upon completion of the 5-year maturity period, the depositor can choose to continue the account with or without making further deposits. 

1. Advance Deposit Options at Maturity: Account holders can make advance deposits for 6 months or 12 months and earn rebates on the same. 

1. Form Submission for Maturity Repayment: To apply for the repayment of the maturity amount, the account holder must submit Form-3 to the accounts office. 

1. Extension of Maturity Period: If the account holder has fewer than 4 defaults, they can extend the maturity period by an additional 5 years. The account holder must submit Form-6 for this extension. 

How to Open a National Savings Recurring Deposit Account 

Opening a National Savings Recurring Deposit (NSRD) account is a straightforward process. Follow these step-by-step instructions: 

1. Step 1: Locate and visit the nearest post office that offers NSRD accounts. Alternatively, you can check with authorised banks providing the scheme.  

1. Step 2: Collect Form-1 (Account Opening Form) from the post office or download it from the official India Post website.  

1. Step 3: Complete the form with accurate personal and contact details. Ensure that the nomination section is filled to nominate a beneficiary for the account. 

1. Step 4: Gather the following documents: 

1. Identity Proof: Aadhaar card, PAN card, voter ID, or passport. 

1. Address Proof: Aadhaar card, utility bill, ration card, or bank passbook. 

1. Passport-Sized Photographs: Two to three recent photographs. 

1. Age Proof (for minors): Birth certificate or school ID card. 

1. Step 5: Submit the completed form along with the required documents to the accounts office. Ensure all photocopies are self-attested. 

1. Step 6: Make the first monthly deposit at the time of opening the account. This amount will determine the denomination of the account and must align with the chosen savings plan (e.g., Rs.100 or multiples of Rs.10). The post office or bank will verify the provided details and documents. This may take a few working days. 

1. Step 7: Once verified, your NSRD account will be activated. You will receive a passbook as proof of your account and for tracking deposits and interest earned. Make subsequent monthly deposits as per the scheme’s requirements. You can also opt for advance deposits to earn a rebate. 

Penalties for Late Payments in NSRD 

NSRD enforces strict rules for timely deposits to maintain account continuity. Here’s what happens in case of defaults: 

1. Account Default Conditions: If an account holder fails to make the monthly deposit for four consecutive months, the account is marked as discontinued. 

1. Revival of Discontinued Account:  

• Accounts can be revived within 2 months of the fourth default. 
• A revival fee of Rs.1 per Rs.100 of the defaulted amount is charged for each month of delay. 
• Overdue deposits must be paid in a lump sum along with the revival fee. 

1. Impact of Non-Revival: If the account is not revived within the stipulated time, it remains discontinued, and the account holder may lose the opportunity to earn full maturity benefits. 

Account holders can avoid penalties by making advance deposits for up to 12 months and earning a rebate on bulk payments. 

Comparison of NSRD with PPF, FD, and NSC 

Here is how the National Savings Recurring Deposit (NSRD) compares with other popular savings schemes: