Post Office RD Interest Rates
Post Office Saving Deposits are recognized by Government institutions. In these savings institutions, a significant portion of your monthly income is deducted. This deducted amount is stored and deposited in your Post Office Savings Bank account. Once you retire you get the benefit of withdrawal from the Post Office Savings Bank Account.
Post Office Recurring Deposit Features
The Post Office RD Interest Rates Account has several benefits. A person who opens a Post Office Savings account can get access to the following sets of benefits-
- The account can be opened by cash or Cheque. No Demand Draft or Discounting Bill Facility can act as the perfect denominator in this regard. You require to deposit an opening balance while opening an account. This opening balance can be transferred either through cash or through a cheque or banking clearance system.
- A nomination facility is available. While opening the post office RD interest rates account you can nominate a beneficiary. This beneficiary will get the benefit if something unfortunate happens with you. For example- if you get deceased before the withdrawal of the amount, the beneficiary whom you nominated will be getting the necessary benefit. Therefore nomination facility acts as an insurance facility just like in life insurance.
- Premature closure is allowed after three years from the date of opening of the RD account. The minimum period for the account holder to keep the account active is for three months.
- In case of premature withdrawal, interest at the rate applicable from time to time to the Post Office Savings Account will be payable on such premature closure of the RD account. Thus in this case calculation of the amount is necessary which is payable on premature withdrawal.
- The date of maturity will be 5 years after the date of opening.
- The account can be extended for a further 5 year
- One loan up to 50% of the balance allowed after one year
- The deposit tenure ranges from 5 years to 15 years
- Visit any India Post Office branch to avail of this service. Your physical presence for opening the account is very important. They verify the documents submitted by you. They will also scan your fingerprints and click requisite pictures.
- TDS deductions are subject to the existing income tax rules as at the time of opening the RD account
- 1 Rs for every 100 rupees shall be charged. This is known as the transaction surcharge or bank notary charges. They are compulsory in all deposit transactions.
Post Office RD Interest Rates 2021
|Tenure||RD Rates for General Citizens||
RD Rates for Senior Citizens
Types of Post Office Recurring Deposit Schemes
Based on the tenure of the deposits, the following Post Office Saving Recurring Deposits Schemes are present-
Under this type of India Post Office Recurring Deposit, your deposit’s tenure ranges between 6 months to 3 years. Such RD is best suited for those who are looking to develop the habit of savings. Thus they help in an easy installments system. Moreover, easy and smooth withdrawal systems are also available.
When you are not willing to commit for the long tenure and are not sure how much benefit you can get from RD, then opting for a medium-term recurring deposit is a good decision. It provides the right balance of flexibility and responsibility to invest so that you can assess its benefits. The tenure ranges from 3 years to 7 years. The monetary benefit thus derived encourages the depositor to keep a significant percentage of money in the post office RD Interest rates savings bank account.
The long-term RD is best suited when you want to earn the return on your investment but you do not have a significant proportion of money to invest. By investing in recurring deposits you get the flexibility of making monthly investments and earn a return similar to FD. They only range from years to 10 years
Documents required to open Recurring Deposit Account in Post Office
|Identity Proof||Address Proof|
|PAN card||Telephone bill|
|Voter ID card||Electricity bill|
Bank Statement with Cheque
|Government ID card||
Certificate/ ID card issued by Post office
Photo ration card
Senior citizen ID card
Post Office Recurring Deposit Rates – Premature Withdrawal
Premature withdrawal of RD with India Post Office Bank is authorized. India Post Office Bank may charge an insignificant amount of sanction as per their banking norms. 1 Rs for every 100 rupees shall be charged however, Partial withdrawal of RD account is not allowed. Withdrawal is always in the form of full settlement.
Calculation of Post Office Recurring Deposit Interest Rates
RD maturity amount that you will get depends on the following three parameters
- Deposit amount – This is the initial amount deposited by a customer in India Post Office. A higher interest rate might be offered on larger deposits. India Post Office offers a deposit amount starting at 100.
- Rate of Interest– India Post Office offers a higher rate of interest on recurring deposits of longer tenure and a lower interest rate on deposits held for a shorter period. The highest interest rate offered by the India Post Office is 5.80% for the deposit amount.
- Period of deposit– Bank of flow-interest for short tenure RDs and a higher interest rate for long tenure RD.
RD Account Opening Process at Post Office
After you submit the requisite authentication and identity proof to the post office savings bank account authorities, your account will be created. To activate the account you need to deposit a minimum amount of money. Then once money gets deposited in cyclical financial transactions, you become eligible for withdrawal upon maturity of the amount deposited.
Nomination Facility on Post Office RD
While opening a Post Office savings bank account, you can choose a nominee of your preferred choice. This nominee maybe your immediate family member. Upon your death, this person would be able to claim the benefit of the deposits in your Post Office Savings Bank Account.
Tax Benefits on Post Office Recurring Deposit
An RD account in the post office falls under the tax exemptions umbrella as per Section 80C. Individuals can claim up to Rs. 1.5 Lakh as per annum tax exemption under this section. Individuals who have an active PAN would pay TDS at the rate of 10%, while those without one would pay the same but at the rate of 20%.
Post Office News Snippets
Online banking has made the activation process simpler. It has been noticed that there are a few things to do improvements and can use POSB account’s internet banking service. The user needs to provide an active mobile number, PAN number, and email ID to link the account to post office savings. In terms of capital protection, PPF and Tax saver FDs by the post office are widely increasing and projecting significant numbers. Post office term deposits have introduced with a sovereign guarantee from the Indian Government and bank deposits are listed as scheduled banks by the Reserve Bank of India (RBI). This is insured up to Rs 5 lakh under DICGC.
Post Office Recurring Deposit Interest Rates – FAQs
✅ What Is The Eligibility For Opening An RD Account?
Indian residents and HUF (Hindu Undivided Families) can open RD accounts. NRIs can also open the RD account through NRO and NRE accounts. Banks provide RD schemes for minors as well, under the guardianship of parents to supervise their finances.
✅ What Is The General Tenure/Duration Of India Post Office Recurring Deposits?
India Post Office RD interest rates can be opened for a minimum of 5 years to maximum tenure of 5 years.
✅ What Exactly Happens On Maturity Of RD Account?
On maturity of your RD account, you can ask the bank to transfer the principal amount and the accumulated interest component directly into your linked savings account. You can also invest your RD amount in fixed deposits after maturity.