The Post Office Recurring Deposit (RD) Scheme is a secure, government-backed savings plan that allows individuals to grow their money over time with fixed monthly deposits. With an attractive 6.7% interest rate, compounded quarterly, this scheme is ideal for risk-averse investors seeking steady returns and capital protection.
Post Office’s Amazing Scheme
| Feature | Details |
|---|---|
| Scheme Name | Post Office Recurring Deposit (RD) |
| Minimum Monthly Deposit | ₹100 |
| Maximum Limit | No upper limit |
| Tenure | 5 years (60 months) |
| Interest Rate | 6.7% (compounded quarterly) |
| Maturity Amount (₹2000/month) | ₹1,42,732 |
| Maturity Amount (₹3000/month) | ₹2,14,097 |
| Maturity Amount (₹5000/month) | ₹3,56,830 |
| Premature Withdrawal | Allowed after 1 year with penalty |
| Official Website | India Post |
The Post Office RD scheme is an excellent low-risk investment option for individuals looking for safe and steady returns. With a 6.7% interest rate, government backing, and easy accessibility, it’s a great choice for salaried individuals, senior citizens, and first-time investors. Whether you invest ₹2000, ₹3000, or ₹5000 per month, your savings will grow steadily, helping you build a secure financial future.
Why Choose the Post Office Recurring Deposit (RD)?
1. Safe and Secure Investment
The Post Office RD is a government-backed scheme, making it one of the safest investment options. Unlike market-based investments, it guarantees fixed returns without any risk of losing money.
2. Competitive Interest Rate
With a 6.7% interest rate (compounded quarterly), the Post Office RD offers better returns than a regular savings account while ensuring steady growth.
3. Flexible Investment Options
You can start investing with just ₹100 per month. There’s no maximum limit, making it a great choice for both small and large investors.
4. Easy Accessibility
With 1.55 lakh post offices across India, the scheme is easily accessible to everyone, including people in rural areas who may not have access to banks.
see also: Understanding No-Cost EMI
How Much Will You Earn? (Calculation & Returns)
Example: Monthly Investment & Maturity Amount
| Monthly Deposit | Total Investment (5 years) | Interest Earned | Total Maturity Amount |
|---|---|---|---|
| ₹2000 | ₹1,20,000 | ₹22,732 | ₹1,42,732 |
| ₹3000 | ₹1,80,000 | ₹34,097 | ₹2,14,097 |
| ₹5000 | ₹3,00,000 | ₹56,830 | ₹3,56,830 |
Formula Used
To calculate the maturity amount of an RD account, use the formula:
M=R×((1+i)n−11−(1+i)−1/3)M = R \times \left( \frac{(1 + i)^n – 1}{1 – (1 + i)^{-1/3}} \right)
Where:
- M = Maturity amount
- R = Monthly deposit amount
- i = Interest rate per quarter (6.7%/4 = 0.01675)
- n = Number of quarters (5 years = 20 quarters)
If you’re not comfortable with manual calculations, you can use the Post Office RD Calculator to determine your returns.
How to Open a Post Office RD Account?
Step-by-Step Guide
- Visit the nearest post office and collect the RD application form.
- Fill in the details such as name, address, nominee, and deposit amount.
- Submit KYC documents, including Aadhaar Card, PAN Card, and passport-sized photos.
- Make your first deposit (₹100 minimum) in cash or via cheque.
- Get the RD passbook, which records your transactions and maturity details.
Alternatively, you can open an RD account through India Post’s online banking portal if you have an existing savings account with them.
see also: SBI Fixed Deposit: How Much to Invest for Rs 31,990 Interest in One Year?
Post Office’s Amazing Scheme FAQs
1. Can I withdraw my money before 5 years?
Yes, premature withdrawal is allowed after 1 year. However, a penalty will be deducted, and the interest rate will be lower than the RD rate.
2. Can I increase my monthly deposit?
No, the deposit amount must remain the same throughout the tenure. If you want to increase your savings, you need to open a new RD account.
3. Is TDS deducted from the interest earned?
No TDS is deducted from Post Office RD interest. However, interest income is taxable and should be declared in your Income Tax Return (ITR).
4. What happens if I miss a payment?
If you miss an installment, a penalty of 1 rupee per ₹100 per month is charged. After four consecutive defaults, the account is discontinued, but you can revive it within two months.
5. Can NRIs invest in Post Office RD?
No, Non-Resident Indians (NRIs) are not eligible to open a Post Office RD account.
