The Post Office Recurring Deposit (RD) Interest Rate is an attractive option for individuals looking to grow their savings securely. By investing just ₹150 per day, you can accumulate a substantial fund of ₹3,21,147 over five years. This savings scheme is ideal for those seeking low-risk investments with guaranteed returns, as it is backed by the Government of India.
In this article, we will break down how the Post Office RD works, its interest rates, and how you can make the most of it. Whether you’re a working professional, a retiree, or a student planning for the future, this guide will help you understand how to build wealth over time with a disciplined savings approach.
Post Office Recurring Deposit Interest Rate
| Feature | Details |
|---|---|
| Investment Amount | ₹150 per day (₹4,500 per month) |
| Total Investment (5 Years) | ₹2,70,000 |
| Current Interest Rate | 6.8% per annum (compounded quarterly) |
| Maturity Amount (After 5 Years) | ₹3,21,147 |
| Total Interest Earned | ₹51,147 |
| Lock-in Period | 5 Years |
| Risk Factor | Low (Government-backed) |
| Official Website | India Post RD |
Investing in a Post Office Recurring Deposit (RD) is an excellent way to grow your savings in a safe and disciplined manner. By saving just ₹150 per day, you can build a fund of ₹3,21,147 in 5 years, thanks to quarterly compounding and a stable 6.8% interest rate.
For those looking for risk-free investment options with assured returns, the Post Office RD is a smart choice. Start today and watch your savings grow steadily!
What is a Post Office Recurring Deposit (RD)?
A Post Office Recurring Deposit (RD) is a fixed-term investment where you deposit a specific amount every month. The interest is compounded quarterly, ensuring steady and secure growth of your money. This scheme is particularly popular among risk-averse investors looking for safe returns.
How Does the Post Office RD Work?
- You open an RD account with India Post by visiting the nearest post office or using the India Post online services.
- Choose a fixed monthly deposit (e.g., ₹4,500 if saving ₹150 daily).
- The interest is compounded quarterly, meaning your money grows faster over time.
- After 5 years, you receive your principal amount plus the accrued interest.
Current Post Office RD Interest Rate (2025)
As of February 2025, the Post Office RD interest rate stands at 6.8% per annum, compounded quarterly. This means your deposits earn interest every three months, leading to higher returns.
Note: The interest rate is subject to periodic revisions by the government. Always check the latest rates before investing.
see also: Post Office Savings Scheme 2025: Invest Rs 1000 to Build a Rs 21,73,551 Fund
How ₹150 Per Day Becomes ₹3,21,147 in 5 Years
If you invest ₹150 daily, that translates to ₹4,500 per month. Over 5 years (60 months), you will have deposited ₹2,70,000. Thanks to quarterly compounding, your investment will grow to ₹3,21,147.
Formula Used for Calculation
The maturity amount (M) for an RD is calculated using:
M=R×((1+i)n−11−(1+i)−13)M = R \times \left( \frac{(1 + i)^n – 1}{1 – (1 + i)^{-\frac{1}{3}}} \right)
Where:
- R = Monthly deposit (₹4,500)
- i = Quarterly interest rate (6.8% ÷ 4 = 1.7% or 0.017)
- n = Total quarters (5 years = 20 quarters)
Plugging these values into the formula, we arrive at the maturity amount of ₹3,21,147.
How to Open a Post Office RD Account?
Eligibility Criteria
- Any Indian citizen above 10 years old can open an RD account.
- Parents/guardians can open an account for minors.
- Joint accounts (up to 2 people) are also allowed.
Steps to Open an RD Account
- Visit the nearest Post Office or log in to the India Post online portal.
- Fill out the RD application form.
- Submit KYC documents (Aadhaar, PAN, and address proof).
- Deposit the first installment (minimum ₹100 per month).
- Receive your passbook or online confirmation.
Pro Tip: If you have a savings account with India Post, you can set up an auto-debit feature to make recurring deposits hassle-free.
Benefits of Investing in a Post Office RD
1. Guaranteed and Secure Returns
Unlike stocks or mutual funds, Post Office RD is government-backed, ensuring zero risk and guaranteed returns.
2. Quarterly Compounding for Faster Growth
The interest is compounded every three months, allowing you to earn more over time compared to simple interest schemes.
3. Flexible Deposit Options
You can deposit as little as ₹100 per month, making it accessible for everyone, from students to retirees.
4. Easy Withdrawals and Loan Facilities
- Premature withdrawal is allowed after 3 years (with penalties).
- You can take a loan against your RD at a nominal interest rate.
5. No Market Fluctuation Risks
Since the interest rate is fixed by the government, there’s no risk of market crashes affecting your investment.
see also: Retirement Planning Why It Matters?
Post Office Recurring Deposit Interest Rate FAQs
1. Can I withdraw my RD amount before maturity?
Yes, but only after 3 years. However, you may receive a lower interest rate.
2. What happens if I miss an RD installment?
A penalty of ₹1 per ₹100 deposit per month is charged. However, you can make a lump sum deposit to continue your RD.
3. Is Post Office RD taxable?
Yes, the interest earned is taxable under ‘Income from Other Sources’. However, TDS is not deducted unless it exceeds ₹40,000 per year.
4. Can NRIs open a Post Office RD?
No, NRIs are not eligible to open a Post Office RD.
5. How can I check my RD balance online?
You can check your balance through India Post’s e-banking portal or Post Office mobile app.
