The Post Office Recursing Deposit (RD) scheme is a popular savings plan run by the Indian Postal Department. This scheme is ideal for those who want to save money for the future by regularly saving small amounts. In the post office RD scheme, investors have to deposit a fixed amount every month, which matures with interest over a period of 5 years. Currently, this scheme is getting an interest rate of 6.7% per year, which occurs on a quarterly basis.
The most important thing about the post office RD scheme is that it can start investing with minimum ₹ 100, and there is no maximum deposit limit. The scheme provides guaranteed returns, which makes it a risk-free investment option. Apart from this, loan facility is also available on RD account, so that you can meet your needs.
Post Office Recurring Deposit Scheme overview
The following are the details of the main features of the post office RD scheme:
| Speciality | Description |
| Interest rate | 6.7% per year (quarterly compound) |
| Minimum deposit | ₹ 100 per month |
| Maximum deposit | No limit |
| Duration | 5 years (60 months), can be extended to 5 years further |
| Account type | Single or joint (maximum 3 adults) |
| Nomination facility | Available |
| Premature clearance | Permission after 3 years |
| Loan facility | Available after 1 year, up to 50% loan can be found |
Benefits of Post Office RD Scheme
There are many advantages to invest in the post office RD scheme:
- Guarantee Returns: This scheme provides returns at a fixed interest rate, which makes it a risk-free.
- Minimum investment: It can start investment from minimum ₹ 100, which makes it accessible to all classes.
- Loan facility: Loan can be taken on RD account, so that you can meet your needs.
- Enrollment facility: It also has enrollment facility available, which can benefit the nominee in the event of death.
- Government guarantee: This scheme is supported by the government, which makes it even more safe.
Documents required for Post Office RD Scheme
The following documents are required to apply for Post Office RD Scheme:
- Aadhar card
- PAN card
- Address certificate
- Photo
With these documents, you can easily apply to the post office or apply online.
How to apply for Post Office RD Scheme online
Follow the following steps to apply online for Post Office RD Scheme:
- Go to the official website of India Post.
- Go to Savings Bank section.
- Select the recurring deposit option.
- Download and fill the application form.
- Upload the required documents.
- Verify OTP.
- Submit the first installment and your account will be activated.
How to apply offline for post office RD scheme
Follow the following steps to apply offline for Post Office RD Scheme:
- Go to your nearest post office.
- Ask and fill RD application forms.
- Submit the required documents.
- Submit the first installment and your account will be activated.
How to calculate interest rate for post office RD scheme
The interest rate in the post office RD scheme is calculated on the principle of compound interest. Here is an example:
If you deposit ₹ 3,000 per month and the interest rate is 6.7% per year, then after 5 years your total deposit will be ₹ 1,80,000 and you will get an interest of about ₹ 30,046, which will give your maturity amount around ₹ 2,10,046.
Taxation for Post Office RD Scheme
The interest earned on the post office RD scheme is taxable under “income from other sources”. If the interest is more than ₹ 40,000 (for ordinary citizens) or ₹ 50,000 (for senior citizens), TDS is deducted.
Questions often asked for Post Office RD Scheme
- Can I change my monthly deposit?
- No, the monthly deposit remains stable for 5 years once determined.
- Does miss a monthly installment impose a fine?
- Yes, a fine of ₹ 1 per ₹ 100.
- Can I withdraw money before maturity?
- Yes, after 3 years you can withdraw money before maturity, but it is fined.
- Can I increase my RD account after 5 years?
- Yes, you can increase your RD account after 5 years and for 5 years.
- How is interest taxable on post office RD?
- Interest is taxable under “income from other sources” and if it exceeds a certain range, the TDS is deducted.
Who can be beneficiaries for Post Office RD Scheme?
The Post Office RD scheme is suitable for those who want to save regularly and guaranteed returns. It is ideal for salaried individuals, pensioners and those who are interested in safe investment.
Post Office RD Scheme Disadvantages
There are also some disadvantages of the post office RD scheme:
- Lower liquidity: You cannot withdraw money before 3 years, and if you withdraw it is fined.
- Interest rate stable: Interest rates may be lower than market rates.
- Penal fines: Monthly installment is fined.
conclusion
The Post Office RD scheme is a safe and guaranteed returns scheme that is suitable for regular savings. It has many benefits such as minimum investment requirement and loan facility, but it has low liquidity and may be lower than the market.
Disclaimer: Post Office RD scheme is a real and government -supported scheme. This information is based on general knowledge and available data. It would be appropriate to consult your financial advisor before investment.
