Rate of Interest On Post Office Recurring Deposit Scheme

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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Rate of Interest On Post Office Recurring Deposit Scheme

Who Can Invest in Post Office RD?

The eligibility criteria to open a post office recurring deposit account are given below:

• The applicant must be a citizen of India.
• The applicant must be at least 18 years of age.
• Minors who are at least 10 years of age can open post office RD account under the guardianship of parents.
• Joint accounts can be opened by two adults.
• Single accounts can be converted into joint accounts and vice versa.
• Any number of post office RD accounts can be opened at any post office.

SEE ALSO:  Post Office Recurring Deposit Scheme

How to invest in Post Office RD?

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.

Tenure of Post Office RD 

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 The deposits can be withdrawn at maturity, along with the total interest earned.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.

Post Office RD: Do’s and Don’ts

Listed below are some of the important points to keep in mind while opening post office RD account:

• As per the terms, the account holder can open a post office RD account by depositing just Rs 10 in the account. The amount deposited must be in multiples of Rs 5. There is no specified upper limit.
• The account can be opened in the name of a minor and a minor of 10 years and above can open and operate the account.
• The account can be opened either by cash or cheque. In case the account is opened by depositing a cheque, the date of the presentation of the cheque shall be considered the date of deposit.
• Subsequent deposits can be made up to the 15^th day of the next month in case the account is opened before 15^th day of the calendar month. Similarly, the deposit can be made up to the last working day of the month, if the account is opened between the 16^th day to the last working day of the month.
• If the deposits are not made within the given time, then a default fee is charged for each default at Rs 0.05 for every 5 rupees.
• After 4 defaults the account is discontinued and can be revived after 2 months. If the account holder does not revive the account within this time, then no further deposits can be made.
• Premature withdrawal is allowed only when a minimum of 12 monthly deposits are made. So, the RD account must be active for a minimum of 1 year to avail this facility.
• You cannot withdraw the full amount. Only 50% of the deposits can be withdrawn from the RD account.
• The withdrawal amount must be in multiples of Rs 5.
• The amount withdrawn must be repaid along with interest before the maturity period.
• The amount withdrawn can be repaid either through EMIs or as a lump sum.

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