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Post Office Recurring Deposit Account

IndianMoney.com Research Team | Updated On Tuesday, May 28,2019, 04:13 PM

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Post Office Recurring Deposit Account

 

 

What is Post Office Recurring Deposit Account?

Post Office Recurring Deposit Account is a deposit scheme offered by India Post. It helps save money each month for a pre-specified time period. Post Office Recurring Deposit account can be easily opened and offers a host of benefits like premature withdrawal of deposits, interest payment, minimum deposit amount, nomination facility and so on. The Post Office Recurring Deposit scheme allows investors save and earn interest, thereby offering attractive returns on maturity.

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Post Office Recurring Deposit Interest Rates:

Post office recurring deposit accounts can be opened with a minimum monthly investment of just Rs 10 and can be availed across income groups. You can build an attractive corpus by investing in a recurring deposit account.

Unlike FD, the recurring deposit requires monthly payments of a pre-specified amount over a fixed time period. The rate of interest offered on these deposits is 7.3% a year, which is compounded on a quarterly basis.

How to Open Post Office Recurring Deposit Account?

Opening a post office RD account is a simple and hassle-free process. You can visit any post office branch for opening a post office RD account. Application forms are available for opening the accounts, which must be filled with the necessary details.

Submit the duly filled application form along with KYC documents. Separate application forms are available for senior citizen RD accounts. There are no restrictions on the number of recurring deposit accounts you can hold. The post office account scheme can be transferred across any post office in India.

Once the account is opened, the payments can be made via cash payment or by cheque. There is no online facility for paying the monthly installments. For payments made through cheque, the date of presentation of the cheque is the date of the deposit.

SEE ALSO: Rate of Interest On Post Office Recurring Deposit Scheme

Documents Required for Opening Post Office Recurring Deposit Account:

Post office recurring deposit schemes are popular in rural and urban areas and mainly encourage the low-income group and the rural population, save and earn better returns. Post office recurring schemes can be availed by a resident Indian, just by submitting KYC documents. However, the applicant must be at least 18 years of age. Minors, who are at least 10 years of age, can also open Post office recurring scheme accounts.

Minimum and Maximum Amount to Open Post Office Recurring Deposit Account:

You can open Post office recurring deposit account by depositing a minimum amount of Rs 10. There are no specified upper limits on these deposits. These schemes are immensely popular in rural and semi-urban areas and allow you make savings for the future. To inculcate the habit of saving in children, the Post Office Recurring deposit accounts can also be opened by minors who are above 10 years of age. So, the minimum deposit is low which makes it accessible across various age groups and income groups.

SEE ALSO: Better Comparison of Post Office RD with Monthly Income Scheme

Salient Features of Post Office Recurring Deposit:

Given below are the salient features of post office recurring deposits:

  • Recurring deposits help save regularly and earn good returns.
  • The recurring deposit can be availed for varied tenures ranging from 6 months to 10 years.
  • Generally, the rates of interest on Post Office Recurring Deposits are high and this ensures better returns on deposit.
  • Nomination facility is available for post office RD accounts. These accounts can be held in the form of joint RD accounts.
  • Recurring deposits can be withdrawn before maturity. The scheme allows beneficiaries withdraw a maximum of 50% of the deposited amount. However, the amount must be paid in full or in instalments before the maturity of the RD account.
  • Premature withdrawals can be made on Post Office Recurring Deposit accounts during emergencies. To avail this facility a minimum of 12 installments must be made.
  • In case the beneficiary misses his payments on the due date, no penalty is charged. A maximum of 4 defaults are allowed under the scheme. For subsequent defaults, the beneficiary must pay a penalty of Rs 0.05 on every Rs 5.

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IndianMoney.com Research Team

The research team at IndianMoney.com comprises of certified and experienced professionals who share the company's vision to make every Indian financially literate by equipping every Indian with right and unbiased advice. IndianMoney.com research team provides newsletters, articles, videos and FAQs on various financial products and concepts only to help you make wise financial decisions.

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