India Post offers RD interest rate @ 6.70% p.a. for tenure of 5 years. The 5-year Post Office Recurring Deposit Scheme is managed by National Savings Institute (NSI), a unit working under the Union Ministry of Finance. As a result, Post Office Recurring Deposit Account is also known as National Savings Recurring Deposit Account. Being backed by the Union Ministry of Finance, PO RD scheme comes with sovereign guarantee, the highest of capital protection and income certainty available to the consumers in the country.
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Post Office Recurring Deposit Highlights
| Minimum Deposit Amount | Rs 100 |
| Tenure | 5 years |
| Compounded Frequency | Quarterly |
| Premature Withdrawal | Allowed |
| Loan Against RD Facility | Available |
| Nomination Facility | Available |
Post Office Recurring Deposit Interest Rates (w.e.f. 1 January 2024)
| Tenure | Interest Rates (% p.a.) |
| 5 years | 6.70 |
Last updated on 20 February 2024
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Features of Post Office RD
- Eligibility –
- a single adult
- joint account allowed for up to 3 adults
- a guardian on behalf of minor/person of unsound mind
- a minor above the age of 10 years in his own name
- Minimum deposit amount- Rs 100
- Tenure – 5 years (60 monthly deposits)
- Depositors can open accounts through cheques or cash. In the case of a cheque, the deposit date shall be the date of cheque clearance
- RD account can be extended for another 5 years by submitting an application at the concerned post office. The interest rate applicable during the account extension will be the same interest rate at which the deposit account was initially opened.
- There is no restriction on the number of accounts
- If the RD account is opened on or before the 15th of a calendar month, the subsequent deposit shall be made on or before the 15th day of the respective month
- If in case the RD account is opened between the 16th day and the last working day of a calendar month, the subsequent deposit shall be credited until the last working day of the month
- RD account can be kept open for up to 5 years without deposit, from the date of maturity
- Repayment of RD account balance on the death of account holder:
- On the death of the account holder, nominee or claimant can get account balance by submitting a claim at the concerned post office
- Once the claim is sanctioned, nominee or legal heirs of the deceased can file the prescribed application at the concerned Post Office to continue the RD till its maturity.
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Guidelines on Default in Subsequent Deposit
- A default @ Rs 1 shall be charged Rs 100 for each defaulted month if the subsequent deposit is not credited until the prescribed day for a month
- The depositor is allowed to make further deposits only if the defaulted monthly deposits, including the default fee, have been first cleared.
- The RD account will be discontinued if the account holder makes more than 4 regular defaults. The account can be revived within 2 months from the 4th default. But, if the deposit account is not revived within 2 months, the account holder is not allowed to make further deposits and the RD account is discontinued.
- If case of less than or 4 defaults in monthly deposits, the depositor has the option to extend the maturity period by as many months as the number of defaults and clear the defaulted instalments throughout that extended period.
Advance Deposit
- Depositor can make an advance deposit of up to 5 years
- Depositor can earn a rebate on making an advance deposit of 6 months or 12 months
- Advance deposit can be made when the RD account is first opened or any time thereafter
Loan Against Post Office RD
- Depositor can avail loan of up to 50% of their balance credit after 1 year of the opening of RD account.
- Loan can be repaid in equal monthly instalments or in one lump-sum
- The interest on loan will be charged at 2% plus the deposit interest rate
- If the depositor fails to repay the loan until maturity, the loan amount, including interest, will be deducted from the maturity value of the deposit account.
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Premature Withdrawal of Post Office RD
- Premature withdrawal of recurring deposit is allowed after 3 years from the date of account opening.
- In case of premature withdrawal, the depositor would receive Post Office Savings Account (POSA) and not the booked RD interest rate, for the duration for which the RD remain opened
- Premature closure is not allowed in case of advance deposits
- Extended RD account can be prematurely closed at anytime. The depositor would receive POSA interest rate if the RD account is closed in less than 1 year