Post Office Recurring Deposit Interest Rate

The interest rates are revised periodically, with a Post Office RD currently earning an interest of 7.1% per annum.

Post Office Recurring Deposit Tenure

A Recurring Deposit is an instrument which is used as a medium-term investment option. Most investors opt for it in order to meet foreseeable emergencies in the coming years. Currently, individuals who wish to open a Post Office RD need to ensure that their deposits are active for a minimum period of 5 years, i.e.

Minimum Tenure of Post Office RD = 5 years

Individuals who wish to continue with their RD even after this period can do so, for there is a provision which permits an RD to be extended by 5 more years, taking the maximum tenure to 10 years. RDs which have been extended beyond 5 years will continue to earn the interest, which is compounded every quarter, as previously.

Quantum of Deposits

A Recurring Deposit provides individuals an opportunity to save for the future by using the resources available to them. Unlike other deposits, the minimum deposit amount is kept low, ensuring that millions of rural and lower-middle class Indians can afford it. The table below highlights the quantum of deposits permitted in an RD.

Minimum Deposit	Rs.10 per month
Maximum Deposit	No upper limit

Individuals can increase their deposit in multiples of Rs.5, ensuring that they invest whatever amount is feasible.

Deposit Dates

An individual opening a Post Office RD is expected to make a total of 60 deposits during the period, i.e. one deposit every month for 5 years. The first deposit should be made when the account is opened, with subsequent monthly deposits to be made before a particular date, depending on the date on which the account was opened.

Delayed RD Deposits – Fine and Penalties

There could be instances where an account holder is unable to deposit the monthly amount in his/her RD. As per applicable rules, a maximum of 4 such defaults are permitted, post which the account will become a discontinued account. Such discontinued accounts can be revived within a period of 2 months after the next (5th) default.

The rules also state that a default penalty of 5 paise will be charged for every 5 rupees which is to be deposited in an account. This fine needs to be paid in addition to the missed deposit amount in order for the account to be revived.

Post Office Recurring Deposit Rebate

In order to incentivize people into depositing money in advance, a Post Office RD provides rebates on advance deposits. These rebates might not sound a lot, but can help an individual with meagre resources save a considerable amount for other purposes. The table below highlights the rebate options provided with a Post Office RD.