Post Office Recurring Deposit

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      Post Office Recurring Deposit

      • The India Post Office provides RD interest rates as high as 5.80%.
      • Quarterly interest is compounded on RDs with India Post Office.
      • The India Post Office accepts deposits as low as 100 rupees.
      • The India Post Office gives senior citizens an RD discount of up to 5.80%.

      Post Office Recurring Deposit Rates – Special Features

      • The account can be opened with cash or a check, and there is also a nomination option.
      • After three years from the date of opening the RD account, it is possible to close it early.
      • If the RD account is prematurely closed, interest will be charged at the rate applicable to the Post Office Savings Account at the time of the premature closing.
      • The maturity date will be 5 years from the date of purchase.
      • The account can be extended for another 5 years if required.
      • After one year, one loan of up to 50% of the balance is permitted.
      • The term of the deposit varies from 5 to 5 years.
      • To use this service, go to any India Post Office branch.
      • TDS deductions are subject to existing income tax laws, with 1 rupee paid for every 100 rupees at the time of opening the RD account.

      Post Office Recurring Deposit Schemes Types

      Based on the tenure,, India Post Office Recurring Deposit can be classified into three types, these are:

      Short-Term RD

      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.

      Medium-Term RD

      When you don’t want to commit for a long period of time and aren’t sure how much value you’ll get from RD, a medium-term recurring deposit is a good option. It strikes the right balance of versatility and investment commitment, allowing you to weigh the pros and cons. The tenure typically lasts between three and seven years.

      Long-Term RD

      When you want to earn a return on your investment but don’t have the funds to invest in a a fixed deposit, a long term RD is the best option. By investing in in recurring deposits,,,, you achieve the versatility of making monthly contributions while receiving a return equivalent to a fixed-income fund. The tenure typically lasts between seven and ten years.

      Post Office Recurring Deposit Account

      Post Office Recurring Deposit

      Customers of the India Post Office may put their surplus savings in a revolving deposit account for a set period of time. At the time of account opening, a customer must make a deposit into their RD account. During the term of the deposit, the customer makes frequent deposits and withdraws some money in the account.

      Post Office Recurring Deposit Rates

      Interest rates on India Post Office Recurring Deposits are influenced by a number of factors. The following are some of them:

      • The interest rate of all banking instruments,, including recurring deposits, is influenced by adjustments in the Cash Reserve Ratio (CRR) and repo rate as directed by the RBI.
      • Recession – During a recession, the RBI releases funds into the economy, thus injecting liquidity. Banks lower RD rates as a result of high liquidity and low credit demand.
      • Inflation – Inflation has a positive impact on the interest rate on a fixed deposit. As a result, in periods of increasing inflation, RD rates appear to be higher.
      • Present Economic Condition – When the economy is booming, people take out more credit to fulfil their personal and business needs. Banks offer higher interest rates during times of high credit demand in order to attract more funds via recurring deposits.

      Post Office Recurring Deposit Interest Rates 2021

      Tenure General Rates Senior Citizen Rates
      5 years to 5 years 5.80% 5.80%

      Post Office Recurring Deposit Interest Calculator

      The amount of RD maturity you will receive is determined by the following three factors.

      • The initial amount deposited by a customer in the India Post Office is called the deposit amount. On larger deposits, a higher interest rate can be offered. The India Post Office accepts deposits of up to 100 rupees.
      • Interest Rates- The India Post Office pays a higher interest rate on longer-term revolving deposits and a a lower interest rate on shorter-term deposits. The highest deposit interest rate offered by India Post Office is 5.80 percent.
      • Deposit duration- The bank offers a low-interest rate on short-term RDs and a a higher interest rate on long-term RDs.

      Post Office Recurring Deposit Opening Process 

      With India Post Office, you can open a Revolving Deposit account for a minimum of 5 years and up to a maximum of 5 years.

      Duration of Post Office Recurring Deposit

      Premature withdrawal of RD with India Post Office

      It is possible to withdraw an RD early from India Post Office Bank. According to their banking policies, India Post Office Bank can levy a nominal penalty.
      There will be a fee of 1 rupee for every 100 rupees. Partially removing funds from an RD account is not permitted.

      Penalty for the delayed instalment of RD with India Post Office

      If you pay after the due date, the bank will give you a grace period of a few days. If you fail to pay your instalment by the due date, India Post Office Bank will impose a penalty in accordance with their policies.
      There will be a fee of 1 rupee for every 100 rupees.

      Illustration: Mr A opens a one-year RD account with monthly deposits of $5,000 at a cost of 5.80 percent. In this scenario, the maturity value at the end of one year would be 61,909, which includes the collected principal and total interest received on the principal amount of 1,909. Similarly, you can use the RD calculator to measure the interest and maturity amounts for longer terms.

      FAQs for Post Office Recurring Deposit

      What are the requirements for opening a Recurring Deposit Account with Post Office?

      RD accounts will be accessible to Indian people and HUFs (Hindu Undivided Families). NRIs will use their NRO and NRE accounts to open RD accounts. Children whose parents keep track of their finances may also use the RD service provided by banks.

      How long does a Post Office Revolving Deposit last?

      Post Office Recurring Deposits are valid for a minimum of 6 months and a maximum of 120 months.

      Is it possible to withdraw funds from an RD account until it matures?

      Is it possible to take money out before the deadline? You can split your RD until it matures if you have an emergency, but your account will be locked after that. As a punishment, banks will subtract 1% to 2% of the interest received on your Post Office Recurring Deposit when it was in their hands. If a depositor requests an early withdrawal before the lock-in period ends, he will only be refunded the principal balance and will not be required to pay interest. All previously issued rights have been revoked, except for the interest cancellation.

      Is it possible to make partial withdrawals from Post Office recurring deposit accounts?

      Post Office does not allow partial withdrawals from Post Office recurring deposits. On the other hand, some banks would let you use your RD as leverage for a loan or an overdraft. On the other hand, premature withdrawals are approved if you have had an RD account with them for at least a year. Unpaid debt is referred to as a debt that cannot be paid in full.
      Premature Closing is an option worth considering, but it comes at a cost.

      When a Post Office Recurring Deposit account hits its maturity date, what happens?

      Before the principal and accrued interest elements of your Post Office Recurring Deposit account mature, you recommend that the Post Office move the principal and deferred interest elements to the corresponding savings account. After the RD matures, you’ll transfer the funds to pledged deposits.

      Is there a nominating option on the Post Office Recurring Deposit account?

      The Post Office can help you set up daily deposits. Only one applicant is eligible, regardless of whether the account is opened in single or joint names. It would help if you made certain that the appointment is set up following Post Office rules. You may make changes to the applicant by filling out and submitting the appropriate form.

      For further information, please visit the official page of Dialabank.