If you’re looking for a safe and rewarding savings plan, the Post Office RD Scheme might just be what you need. It’s designed for those who want to build a sizable corpus through small, regular monthly investments. And the best part? The returns are guaranteed, backed by the Government of India!
Whether you’re a student, a salaried individual, or a retired professional, the Recurring Deposit (RD) scheme by India Post gives you the discipline to save and the peace of mind that comes with secure growth. In this guide, we’ll break down exactly how much you can earn by depositing ₹1,000, ₹2,000, ₹5,000, or ₹10,000 every month — and the numbers will pleasantly surprise you!
Post Office RD Scheme
| Feature | Details |
|---|---|
| Scheme Name | Post Office Recurring Deposit (RD) |
| Interest Rate (as of Q1 2025) | 6.7% per annum (compounded quarterly) |
| Tenure | 5 Years |
| Minimum Monthly Deposit | ₹100 |
| Maturity on ₹1000/month | ₹71,366 |
| Maturity on ₹2000/month | ₹1,42,732 |
| Maturity on ₹5000/month | ₹3,56,830 |
| Maturity on ₹10,000/month | ₹7,13,659 |
| Official Source | India Post |
The Post Office RD Scheme is a brilliant tool to grow your savings steadily and securely. With an attractive 6.7% annual interest rate, quarterly compounding, and government assurance, it’s a great choice whether you’re saving for a rainy day or a specific life goal.
By depositing just ₹1,000 a month, you can grow your savings by over ₹11,000 in 5 years. Multiply that with higher deposits, and you’ll be looking at a substantial maturity amount — all without taking any risk.
What Is the Post Office RD Scheme?
The Post Office Recurring Deposit (RD) Scheme is a savings plan where you deposit a fixed amount every month for 5 years (60 months). It helps you develop a regular saving habit, and in return, you earn compound interest, which grows your money more efficiently than simple interest.
Since the interest is compounded quarterly, your earnings grow faster over time compared to monthly compounding schemes.
Key Features:
- Government-backed scheme – risk-free and reliable.
- Flexible deposit amount – starts from ₹100/month, and you can increase in multiples of ₹10.
- Loan facility – After 12 installments, you can avail up to 50% of the balance as a loan.
- Nomination facility – You can nominate a beneficiary at the time of opening the RD.
see also: If you invest Rs 5,000 in RD every month, you will get a return of Rs 8 lakh
How Much Will You Get on Depositing ₹1000, ₹2000, ₹5000, or ₹10,000?
Let’s break it down using the current 6.7% interest rate, compounded quarterly. These are approximate maturity values for a 5-year period.
Maturity Value Table
| Monthly Deposit | Total Investment | Estimated Interest | Maturity Amount |
|---|---|---|---|
| ₹1,000 | ₹60,000 | ₹11,366 | ₹71,366 |
| ₹2,000 | ₹1,20,000 | ₹22,732 | ₹1,42,732 |
| ₹5,000 | ₹3,00,000 | ₹56,830 | ₹3,56,830 |
| ₹10,000 | ₹6,00,000 | ₹1,13,659 | ₹7,13,659 |
How Is Interest Calculated in Post Office RD?
Interest is compounded quarterly, which means you earn interest not just on your deposits, but also on the interest already earned. This is the magic of compounding!
Formula:
A=P×(1+rn)ntA = P \times \left(1 + \frac{r}{n}\right)^{nt} Where:
- A = maturity amount
- P = monthly deposit
- r = annual interest rate (in decimal)
- n = number of times interest is compounded per year (quarterly = 4)
- t = time in years
This ensures that even a small amount like ₹1,000 per month grows significantly over 5 years.
How to Open a Post Office RD Account
Offline Method (at a Post Office Branch)
- Visit your nearest Post Office branch.
- Fill in the RD Account Opening Form.
- Submit KYC documents (Aadhaar, PAN, passport-size photo).
- Deposit your first installment (minimum ₹100).
- Receive your passbook with transaction records.
Online Method (via India Post Payments Bank)
- Download the IPPB Mobile App from Google Play or App Store.
- Link your Post Office savings account.
- Choose Recurring Deposit under services.
- Set up your monthly contribution amount.
- Authorize via OTP and your RD account is created instantly!
Benefits of Post Office RD
For Working Professionals:
- Ideal for disciplined savings from monthly salary.
- Loan facility offers a backup in emergencies.
For Families:
- A great way to save for children’s education or a family goal.
- Nomination ensures financial security for loved ones.
For Retirees:
- A safe and steady growth option with minimal risk.
- Interest income can supplement pension earnings.
Things to Keep in Mind
Missed Payments:
- If you miss 4 consecutive deposits, the account is discontinued.
- But you can revive it within 2 months from the date of discontinuation.
Premature Closure:
- Allowed after 3 years, but you earn savings account interest only.
- Not advisable unless absolutely necessary.
Extension Facility:
- After 5 years, you can extend the RD for another 5 years with the same terms.
see also: Post Office NSC: Deposit Rs 10,000, get this much return
Post Office RD Scheme FAQs
Q. Is the Post Office RD better than a bank RD?
Yes, if you prefer government-backed security, the Post Office RD is better. However, some banks may offer slightly higher interest rates — but with more risk.
Q. Is the interest earned taxable?
Yes, the interest is taxable as per your income slab, but no TDS is deducted by the post office. You must declare it while filing ITR.
Q. Can I open a joint RD account?
Yes, joint accounts (maximum 3 adults) are allowed in Post Office RD.
Q. What happens if I deposit more than the agreed monthly amount?
The post office will not accept excess payments. You must stick to the chosen monthly deposit amount.
