Recurring Deposit

4/7/2022

Post Office Recurring Deposit (PORD) Scheme is a systematic savings plan, where you can deposit your money for a definite time period and earn interest on that. You need to invest an equal amount of sum for a minimum period of 60 months. 5 years post office recurring deposit scheme allows you to earn fixed yet guaranteed interest on your investment.

Recurring Deposit Calculator Plan your Savings. Find out how much you can save by making regular monthly deposits with our Recurring Deposit plan. Just key in the amount you want to save and the tenure you wish to invest for. The RD calculator will give you total savings for the set interest rate. A recurring deposit allows you to save a pre-determined amount every month with the benefit of compounding through interest income. A recurring deposit can help bring in discipline for long-term savings and even provide a loan against RD in times of financial distress.

Though banks also offer recurring deposit accounts, however, Post Office RD is a more popular saving tool in rural and suburban areas. The interest is compounded quarterly in a PORD account. As a result, you get a higher interest rate compared to many other small savings schemes.

In this article I will discuss about everything about Post Office RD like:

Post Office RD Interest Rate
Where Can You Open an Account
How to Open an RD in Post Office
Important Features
Online Payment Rules
Minimum and Maximum Deposit Limit

Post Office RD Interest Rate 2021

Post Office 5 year recurring deposit account (PORD) offers an interest rate of 7.3% per annum. The interest is compounded quarterly, consequently, giving a rate of 8.4% compounding quarterly. As a result, you can rest assured that the money is multiplied at the time of maturity.

The interest rates are fixed periodically. Therefore, make sure to check the current interest rate of post office recurring deposit, before opening an account.

Where Can You Open an Account?

You can open the account in any of your nearest/ preferred post office.

Documents Required for Post Office Recurring Deposit

The needed documents for opening an account are:

An account opening form from your nearest post office
Two passport size photographs
Address and identity proof such as the Aadhaar card, passport, driving license, voter ID card, ration card, PAN card, or declaration in Form 60 or 61 as per the Income Tax Act, 1961

How to Open an RD in Post Office?

First of all, collect the documents mentioned above.

Also, carry the original identity proof for verification at the time of account opening. Fill up the form carefully and provide nominee details. Finally, get a witness signature and complete the procedure to get started.

Post Office Recurring Deposit Features

An account can be opened by cash only.
One account can be opened in one post office.
To keep the account active, it is necessary to have at least one transaction (either deposit or withdrawal) in three financial years.
You have the option to convert a Single account into a Joint and Vice Versa.
Two or three adults can open a Joint account together.
Cheque facility can be taken in an existing account also.
Nomination facility is available at the time of opening and also after opening of the account.
You can transfer your RD account from one post office to another.
The account can be opened in the name of a minor. Also, a minor of 10 years and above can open and operate the account.
Minors need to apply for conversion of the account in his/ her name after attaining a majority.
Customers are allowed to deposit and withdraw through any electronic mode in CBS Post offices.

Also Check: Post Office Monthly Income Scheme (MIS): Interest Rates 2021, Maturity Calculator, Premature Withdrawal Rules

Post Office Recurring Deposit Tax Benefit

Recurring Deposit schemes are not eligible for tax exemption.

Post Office Recurring Deposit (RD) Online Payment

Post office RD online payment is not yet possible except through Electronic Clearing Service (ECS). Hence, you can use ECS to pay the amount. Furthermore, if you have an agent, he or she can use the post office agent portal and do the online payment for you.

Minimum and Maximum Deposit in Post Office RD Account

The minimum amount to deposit in Post Office RD is Rs.10 and it should be in multiples of Rs.5, afterward.

No such maximum limit specified, as of now.

FAQs on Post Office RD

Can I open post office recurring deposit online?

No, this facility is not yet available. Therefore, you need to open an account in the post office itself.

What is the maturity value of post office RD?

The maturity period is of 5 years where you need to deposit 60 installments of equal monthly sums. You can use the post office recurring deposit maturity calculator to calculate the maturity amount.

What is the tenure of post office recurring deposit premature closure?

Premature closure is permissible after expiry of three years. Furthermore, the interest rate applicable to post office savings account shall be payable in this case.

Is post office RD premature withdrawal possible?

Premature withdrawal of recurring deposits in the post office is possible after 3 years. Also, one withdrawal of 50% of the balance is allowed after one year.

What are the late payment fees?

Post Office Recurring Deposit

Monthly deposit amounts can be credited on any day of the month. Due to any reason, if the monthly installment is not credited for any particular month, then it will be considered as a default. The amounts for that month can be credited with a penalty of 0.20 paise for Rs. 10/- (for each month of default). And, a maximum of 4 defaults is allowed.