If you have been searching for a safe investment plan with guaranteed returns, the Post Office Recurring Deposit (RD) scheme might have caught your eye. Recently, many have been curious whether investing Rs 4,000 monthly in Post Office RD can really fetch a maturity amount of Rs 2.85 lakh in 5 years. The short answer? Yes, it’s accurate — and we’ll break down the full details for you here.
RD of Only Rs 4000 in Post Office
| Feature | Details |
|---|---|
| Scheme Name | Post Office Recurring Deposit (RD) |
| Monthly Deposit | Rs 4,000 |
| Tenure | 5 Years (60 months) |
| Interest Rate (as of 2025) | 6.7% per annum (compounded quarterly) |
| Total Investment | Rs 2,40,000 (Rs 4,000 x 60 months) |
| Maturity Amount | Rs 2,85,463 |
| Interest Earned | Rs 45,463 |
| Official Website | India Post Savings Schemes |
If you’re looking for a safe, simple, and rewarding savings plan, the Post Office RD scheme is a great place to start. With a modest monthly investment of just Rs 4,000, you can build a corpus of over Rs 2.85 lakh in 5 years, all while enjoying peace of mind that your money is secure.
It’s ideal for those who want to cultivate a regular saving habit without taking high financial risks. Whether you’re saving for a short-term goal, your child’s education, or just building an emergency fund, this scheme fits well in any financial plan.
What is the Post Office RD Scheme?
The Post Office Recurring Deposit (RD) is a small savings scheme backed by the Government of India. It allows individuals to deposit a fixed amount every month and earn compound interest on it, offering a safe, steady growth to your money.
The RD scheme is particularly popular among:
- Salaried individuals
- Parents saving for children
- Retirees looking for low-risk options
It’s one of the few instruments that combine government security, fixed returns, and disciplined savings.
see also: Get ₹20 Lakh in 5 Years from Post Office RD
How Rs 4,000 per Month Becomes Rs 2.85 Lakh in 5 Years
Interest Calculation Breakdown
The Post Office RD calculates interest on a quarterly compounding basis, which means the interest is added to the principal every 3 months, leading to faster growth.
Let’s see how the math works:
- Monthly Investment: Rs 4,000
- Duration: 60 months (5 years)
- Total Deposit: Rs 2,40,000
- Interest Rate: 6.7% p.a.
- Compounding Frequency: Quarterly
Using the standard RD formula or an official RD calculator, the maturity amount comes out to approximately Rs 2,85,463, which includes around Rs 45,463 as interest.
Benefits of Investing in Post Office RD
1. Guaranteed Returns
This is a government-backed scheme, meaning there is no risk of loss, unlike market-linked investments.
2. Compounded Growth
Since interest is compounded quarterly, your money grows faster compared to simple interest options.
3. Loan Facility
After 12 months, you can avail a loan of up to 50% of your deposit balance.
4. Discipline in Saving
It encourages monthly saving habits, helping people build a corpus for future goals.
5. Flexible for All
Anyone can open an RD account, including:
- Individual adults
- Minors aged 10+
- Joint account holders (up to 3 people)
Step-by-Step Guide: How to Open a Post Office RD Account
Step 1: Visit Your Nearest Post Office
Collect the RD Account Opening Form or download it from the India Post website.
Step 2: Fill in Your Details
You’ll need to provide:
- Name, address, and age
- Nominee details
- Monthly deposit amount
Step 3: Attach Required Documents
Include the following:
- Aadhaar card
- PAN card
- Passport-sized photos
- Address proof (utility bill, bank passbook, etc.)
Step 4: Deposit Your First Amount
Make your initial deposit (Rs 100 minimum, Rs 4,000 in our example).
Step 5: Get Your Passbook
Once your account is opened, you’ll receive a passbook that records all your transactions.
Taxation on Post Office RD
Many investors wonder, “Is the interest earned from RD taxable?“
Yes, it is. Here’s what you need to know:
- Interest Income is taxable under “Income from Other Sources”
- If your annual interest exceeds Rs 10,000, TDS may be applicable (currently 10%)
- There is no Section 80C deduction available for RD deposits
So, plan your taxes accordingly and declare your RD interest in your ITR.
Alternatives You Might Consider
If you’re exploring similar options, here are a few alternatives:
1. SBI Recurring Deposit
- Offers 6.5% interest
- Similar 5-year maturity
2. PPF (Public Provident Fund)
- Interest rate: 7.1% p.a.
- Lock-in: 15 years
- Tax-free interest
3. National Savings Recurring Deposit (NSRD)
- Also from India Post
- Similar features with minor differences in payout structure
Practical Tips to Maximize Your RD Returns
- Automate your deposits via ECS or standing instructions
- Avoid delayed payments as they may incur penalties
- Reinvest the maturity amount into another RD or PPF for compounding wealth
- If planning long term, consider PPF for better tax treatment
see also: Post Office New Scheme 2025: Big Profit in Less Investment
RD of Only Rs 4000 in Post Office FAQs
Q1. Is Post Office RD better than Bank RD?
A: Yes, in terms of security, India Post RDs are safer as they are backed by the central government. However, some banks may offer higher rates.
Q2. Can I withdraw money from my RD before 5 years?
A: Premature withdrawal is allowed after 3 years, but interest will be adjusted accordingly.
Q3. What if I miss a monthly deposit?
A: A penalty of Rs 1 for every Rs 100 will be charged for each month of delay.
Q4. Can I invest more than Rs 4,000 per month?
A: Yes, you can invest any amount in multiples of Rs 10. There’s no upper limit.
Q5. Is the interest fixed or does it change over time?
A: The interest rate is fixed at the time of opening the account and remains unchanged for 5 years.
