Recurring deposit refers to saving schemes where you can deposit money each month and earn interest on the deposits. Recurring deposit scheme is also offered by India Post which is a popular scheme among salaried professionals and people with moderate income. The post office recurring deposit can only be opened for a period of 5 years.
The post office recurring deposit is an ideal investment for young professionals and workers in the unorganized sector as it helps nurture the habit of investing regularly in a periodic manner. Currently the rate of interest on post office RD is 7.3% which is compounded quarterly.
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The eligibility criteria to open a post office recurring deposit account are given below:
SEE ALSO: Post Office Recurring Deposit Scheme
To open a post office RD account, you must visit the nearby post office. Collect the application form and fill it accurately. Submit the duly filled and signed application form along with KYC documents. Post office RD account can be opened either by paying in cash or through cheque.
In case the payment is made by cheque, the date of the presentation of the cheque is considered as the date of deposit. For senior citizens, separate forms are available for opening post office RD. You can open any number of RD accounts in one or multiple post offices. Transfer of accounts is also permitted from one post office to the other. This feature is especially useful for professionals who have transferable jobs. The accounts can also be transferred from single to joint accounts and vice versa.
Post office recurring deposit is a 5-year scheme, where you must make regular monthly deposits for 5 years. The deposits can be withdrawn at maturity, along with the total interest earned. This scheme enables the depositor to increase savings by investing in post office recurring deposits and earn interest over a period. Account-holders are also provided with the option to extend the deposit for another five years on a year to year basis.
Listed below are some of the important points to keep in mind while opening post office RD account:
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