Looking for a simple yet secure way to grow your savings? The Post Office RD Scheme is one of the best government-backed options available today. By saving just ₹ 600 every month, you can get bumper returns in 5 years with guaranteed interest rates and zero market risk. This article will walk you through the complete details, practical benefits, and steps to start investing, so you can make an informed financial decision.
Post Office RD Scheme (2025)
| Feature | Details |
|---|---|
| Monthly Deposit | Minimum ₹100, Multiples of ₹10 (Example: ₹600/month) |
| Interest Rate (as of 2024) | 6.7% per annum, compounded quarterly |
| Investment Tenure | 5 years (60 monthly deposits) |
| Total Investment (Example) | ₹36,000 (₹600 x 60 months) |
| Maturity Amount (Example) | Approx. ₹42,820 after 5 years |
| Loan Facility | After 12 installments and 1 year, loan up to 50% of balance |
| Premature Closure | Allowed after 3 years (with conditions) |
| Taxation | Interest taxable as per investor’s income tax slab |
| Official Website | India Post |
The Post Office RD Scheme is a safe, predictable way to build wealth over a fixed period. Whether you’re a beginner looking for a simple savings plan or a seasoned professional planning long-term, investing just ₹600 monthly can yield significant, guaranteed returns. Plus, backed by the Government of India, the scheme carries minimal risk, making it ideal for conservative investors.
Why Choose the Post Office RD Scheme?
The Post Office Recurring Deposit (RD) Scheme is a favorite among investors who prefer low-risk, fixed returns. Offered by the India Post, it allows individuals to deposit small amounts monthly and accumulate a lump sum over time, with an attractive interest rate.
Whether you’re a beginner, a working professional, or planning for your child’s future, this scheme offers reliability and steady growth without worrying about market volatility.
see also: How Many Times a Year and On Which Date of the Month Do You Get Interest?
How Does the Post Office RD Scheme Work?
1. Monthly Contributions
You can start by depositing as little as ₹100 per month, but for this guide, we’ll use ₹600 per month as an example. Deposits must be made consistently every month for the entire 5-year period.
2. Guaranteed Interest
The current interest rate is 6.7% per annum, compounded quarterly. This means your money earns interest every three months, which is then reinvested to compound further.
3. Total Returns
Here’s how your money grows:
- Total Investment: ₹600 x 60 months = ₹36,000
- Interest Earned: Approximately ₹6,820
- Maturity Amount: Around ₹42,820 after 5 years
The longer you stay invested and the higher your monthly deposit, the more your savings will grow.
How to Open a Post Office RD Account
Opening an RD account is straightforward. Follow these steps:
Step 1: Eligibility Check
- Any Indian citizen (18+ years)
- Joint accounts and accounts for minors also allowed
Step 2: Required Documents
- Identity Proof: Aadhaar, PAN Card, Passport, etc.
- Address Proof: Utility bills, Voter ID, etc.
- Passport-size photograph
- Duly filled RD account opening form
Step 3: Visit Nearest Post Office
Go to your local India Post branch, submit documents, deposit initial amount (minimum ₹100), and complete the account setup.
Step 4: Payment Options
You can make monthly payments via:
- Cash deposit at Post Office
- Electronic transfer from linked savings account
Why Saving ₹600/Month in Post Office RD Makes Sense
Let’s break it down for better clarity:
Personal loan – पर्सनल लोन कैसे लें? जानें पूरी प्रक्रिया और शर्तें! देख लो लोन लेने से पहले
| Saving Amount per Month | Total Invested in 5 Years | Approximate Maturity Amount |
|---|---|---|
| ₹600 | ₹36,000 | ₹42,820 |
| ₹1,000 | ₹60,000 | ₹71,370 |
| ₹5,000 | ₹3,00,000 | ₹3,56,850 |
| ₹8,600 | ₹5,16,000 (over 10 years) | ₹1,056,000+ |
Pro Tip: Want to accumulate more than ₹1 lakh? Increase your deposit or extend the tenure to 10 years.
Additional Benefits
Loan Facility
After one year and 12 successful payments, you can take a loan up to 50% of your balance.
Premature Closure Option
Need to withdraw early? Allowed after 3 years, but with reduced interest benefits.
Extension Facility
After completing 5 years, you can extend the RD account for another 5 years.
Practical Tips to Maximize Returns
- Set up Standing Instructions: Automate monthly payments to avoid penalties.
- Avoid Missed Payments: Post Office charges a penalty of ₹1 for every ₹100 defaulted.
- Start Early: Longer compounding = higher returns.
- Consider Joint Accounts: Useful for family savings and tax planning.
Taxation Rules
- Interest earned is taxable.
- No TDS deduction; however, declare interest income in your ITR.
- No Section 80C tax benefits under this scheme.
see also: PPF, SSY, SCSS, NSC Change from April 2025?
Post Office RD Scheme FAQs
1. What is the interest rate for Post Office RD Scheme in 2025?
Currently, the interest rate is 6.7% per annum, compounded quarterly.
2. Can I open an RD account online?
No. You need to visit the nearest Post Office branch to open the account. However, monthly deposits can be automated online after account setup.
3. Is there any penalty for missed payments?
Yes. A penalty of ₹1 per ₹100 defaulted applies for each missed monthly payment.
4. Can minors open a Post Office RD account?
Yes, guardians can open accounts on behalf of minors.
5. Is there any tax benefit under Section 80C?
No, the RD Scheme does not qualify for deductions under Section 80C.
