Looking for a safe, disciplined, and government-backed savings option? The Post Office RD Scheme (Recurring Deposit Scheme) might just be the perfect fit for you! By saving as little as ₹ 600 every month, you can secure attractive returns in just 5 years. In this article, we will break down the entire scheme, offering practical insights, easy-to-follow steps, and clear examples that both beginners and professionals will appreciate.
Post Office RD Scheme
| Feature | Details |
|---|---|
| Scheme Name | Post Office Recurring Deposit (RD) Scheme |
| Monthly Deposit | Minimum ₹ 100 (in multiples of ₹ 10); Example: ₹ 600 per month |
| Tenure | Fixed 5 years (60 months) |
| Interest Rate (2025) | 6.7% per annum, compounded quarterly |
| Total Investment Example | ₹ 600 x 60 months = ₹ 36,000 |
| Maturity Amount (Approx) | ₹ 42,000 (including interest) |
| Eligibility | All Indian residents, minors above 10 years |
| Loan Facility | Up to 50% loan after 12 installments |
| Premature Closure | Allowed after 3 years with penalties |
The Post Office RD Scheme is a brilliant option for individuals looking for a secure, disciplined, and flexible savings plan. Whether you’re saving for a child’s education, a future investment, or simply to build financial discipline, this scheme offers guaranteed returns backed by the Indian government.
What is the Post Office RD Scheme?
The Post Office Recurring Deposit (RD) Scheme is one of India’s most trusted savings plans, offered by the India Post (Department of Posts). It allows individuals to invest a fixed sum of money every month and earn guaranteed interest, compounded quarterly. The scheme is ideal for those who want to develop a habit of regular savings without taking high risks.
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Why Choose the Post Office RD Scheme?
1. Government-Backed Security
Being a product of India Post, it is fully backed by the Government of India, making it one of the safest savings schemes in the country.
2. Discipline & Flexibility
Start saving with just ₹ 100 per month. If you can afford more, you can increase the deposit in multiples of ₹ 10.
3. Attractive Interest Rate
The current interest rate of 6.7% p.a. (2025) is higher than many regular savings accounts and is compounded quarterly for better growth.
4. Loan Facility
Need funds urgently? You can take a loan of up to 50% of your RD balance after 12 installments.
5. Nomination & Joint Accounts Available
You can add a nominee to your account or open a joint account for family savings.
How to Open a Post Office RD Account: Step-by-Step Guide
Step 1: Visit Nearest Post Office or Access Online Portal
Head to your nearest post office. Alternatively, if you’re registered for India Post’s e-banking, log in to the official portal.
Step 2: Carry Necessary Documents
Prepare the following:
- Proof of Identity: Aadhaar Card, Voter ID, PAN Card
- Proof of Address: Utility bill, Aadhaar, Driving License
- Passport-Sized Photographs
Step 3: Fill Application Form
Request the RD Account Opening Form at the post office or download it online. Fill in your details accurately.
Step 4: Initial Deposit Payment
In This Scheme of Post Office, Your Money will Double in 115 Months; You can start with just ₹1000
Deposit your chosen monthly installment (minimum ₹ 100). For example, ₹ 600 if you wish.
Step 5: Account Activation
Once verified, your Post Office RD Account will be active. You will receive a passbook or online confirmation.
How Much Will You Get After 5 Years?
Let’s assume:
- Monthly Deposit = ₹ 600
- Tenure = 5 years (60 months)
- Interest Rate = 6.7% p.a. compounded quarterly
Total Investment: ₹ 600 x 60 months = ₹ 36,000
Maturity Amount: Approximately ₹ 42,000
What Happens if You Miss a Payment?
Missed payments attract penalties. However, the scheme allows flexibility:
- Default Fee: ₹ 1 for every ₹ 100 per month missed.
- Revival Period: Account can be revived within 2 months of default.
Can You Close the RD Account Early?
Yes!
- Premature Closure Allowed After 3 Years
- Interest Rate: You may earn interest applicable to Post Office Savings Account (lower rate).
- Penalty: Some penalty charges apply.
Taxation on Post Office RD Scheme
- No tax benefits under Section 80C unlike some other schemes.
- Interest Earned is Taxable as per your income tax slab.
see also: SIP vs FD vs PPF: Best Investment Option?
Post Office RD Scheme FAQs
1. Who can open a Post Office RD account?
Any Indian citizen, including minors above 10 years. Joint accounts are also allowed.
2. What is the minimum and maximum deposit amount?
Minimum is ₹ 100 per month, with no upper limit. Deposits should be in multiples of ₹ 10.
3. Can I extend my RD after 5 years?
Yes, you can extend it by another 5 years.
4. Is premature closure allowed?
Yes, after 3 years with applicable penalties.
5. Does the RD Scheme offer tax benefits?
No, there are no Section 80C deductions available. However, interest is taxable.
