Post Office Recurring Deposit Details: Depositing Rs 800 Every Month in the Post Office Will Create a Huge Fund, See Calculation

If you’re looking for a safe and reliable way to grow your savings, the Post Office Recurring Deposit (RD) scheme is a great choice. With just Rs 800 deposited every month, you can build a sizeable fund over time. Whether you’re a working professional, a homemaker, or even a student, this savings plan is simple to use, backed by the Government of India, and offers guaranteed returns.

Post Office Recurring Deposit

Feature	Details
Scheme Name	Post Office Recurring Deposit (RD)
Monthly Deposit	Rs 800
Interest Rate (as of Q1 FY 2025-26)	6.7% per annum (compounded quarterly)
Tenure	5 years (60 months)
Total Deposit	Rs 48,000
Maturity Amount	Approx. Rs 56,928
Total Interest Earned	Rs 8,928
Risk Level	Nil (Government-backed)
Official Link	India Post

The Post Office Recurring Deposit Scheme is one of the most reliable and affordable savings tools in India today. By depositing just Rs 800 per month, you can create a fund of nearly Rs 57,000 in 5 years. It’s a safe, government-backed scheme that offers better returns than a regular savings account and is ideal for conservative investors. Whether you’re saving for a future goal or just want to cultivate a saving habit, this plan is worth considering.

What is a Post Office Recurring Deposit (RD)?

The Post Office Recurring Deposit is a small savings scheme run by India Post under the Ministry of Finance. It’s designed for individuals who want to build savings through disciplined, monthly contributions. Unlike lump sum investment schemes, an RD allows you to invest a fixed amount every month, making it easy for salaried employees, housewives, and even students to participate.

It offers assured returns and is backed by the Government of India, making it one of the most secure and trusted savings options in the country.

How Much Will You Earn by Depositing Rs 800 Monthly?

Let’s take a practical example:

Monthly Deposit: Rs 800
Interest Rate: 6.7% per annum (compounded quarterly)
Tenure: 5 years (60 months)

Using the standard RD maturity formula:

M=R×(1+i)n−11−(1+i)−1/3M = R \times \frac{(1 + i)^n – 1}{1 – (1 + i)^{-1/3}}

Where:

M = Maturity amount
R = Monthly deposit (Rs 800)
i = Quarterly interest rate = 6.7% / 4 = 1.675% = 0.01675
n = Number of quarters = 5 x 4 = 20

Calculation:

Your total deposit over 5 years = Rs 800 x 60 = Rs 48,000
Approximate maturity value = Rs 56,928
Total interest earned = Rs 8,928

This means, by saving just Rs 800 a month, you can grow your money significantly without any risk.

Benefits of the Post Office RD Scheme

1. Guaranteed Returns

Since it’s a government-backed scheme, your returns are guaranteed, unlike mutual funds or stock investments.

2. Affordable Monthly Savings

You can start with just Rs 100, and increase in multiples of Rs 10. This makes it accessible for every Indian household.

3. Compounded Interest

Interest is compounded quarterly, which helps your money grow faster over time.

4. Easy Access and Nationwide Reach

Available at all post offices across India, making it convenient for rural and urban investors.

5. Nomination and Transfer

Nomination facility is available, and accounts can be easily transferred between post offices.

Who Should Invest in This Scheme?

Students who want to learn disciplined saving
Salaried employees looking for stable growth
Housewives managing household finances
Senior citizens who prefer secure, fixed returns
Anyone who wants to create a long-term emergency fund

The Post Office RD is ideal for those with a low-risk appetite but a goal to accumulate a decent corpus over time.

How to Open a Post Office RD Account

Opening an RD account in the post office is easy and straightforward:

Step 1: Visit Your Nearest Post Office

Carry your KYC documents (Aadhaar card, PAN card, passport-size photo, etc.) and cash or cheque for the initial deposit.

Step 2: Fill the Application Form

Ask for the RD account opening form and fill it with the required details.

Step 3: Submit the Form

Attach the documents and submit them with your deposit amount.

Step 4: Get Your RD Passbook

You’ll receive a passbook where all your monthly deposits and interest will be recorded.

Alternatively, you can also open an RD account online via India Post Payments Bank (IPPB) app if you already have a savings account.

Taxation on Post Office RD

Interest earned is fully taxable under “Income from Other Sources.”
TDS is not deducted by the post office, but you are required to declare the income while filing your ITR.
No Section 80C benefit is available for investments in Post Office RD.

Other Alternatives to Compare

Scheme	Interest Rate (approx.)	Tenure	Risk Level
Post Office RD	6.7%	5 years	No Risk
Bank RD (e.g. SBI, HDFC)	6.5% – 7.1%	1-10 years	Low Risk
Mutual Fund SIP	Varies (8%-12%)	No fixed term	Market Risk
PPF	7.1% (as of Q1 FY26)	15 years	No Risk