The National Savings Recurring Deposit account is offered by the Post Office as a popular low-risk investment scheme with fixed rate of interest on deposits. It helps you earn guaranteed returns with predetermined interest rates by the government with periodic revisions. Post Office RD lets you invest minimal amounts of ₹100 for a fixed tenure of 5 years. Helping you earn good returns on your investment.
The Post Office Recurring Deposit interest rate is set at 6.7% p.a. providing a safe and reliable way to accumulate savings over time. The Post Office RD is perfect if you are looking to save small amounts regularly. Helping you save for medium to long-term financial goals.
The Post Office RD lets you plan your savings by depositing your entire 5-year tenure upfront. To encourage this, they offer a rebate (small bonus) for advance deposits of at least 6 months. You get ₹10 for a 6-month advance and ₹40 for 12 months (in multiples of ₹100).
Post Office RD Interest Rate
The Post Office RD interest rates 2024 is offered at 6.7% p.a. for both general and senior citizens. Compounded quarterly, this competitive interest rate offers you an attractive way to grow your savings steadily over a fixed period.
| Maturity Period | Interest Rate% General Citizen | Interest Rate% Senior Citizen |
|---|---|---|
| 5 Years | 6.7% p.a | 6.7% p.a |
*Note- The interest rates are subject to market rates and may change. Please check the Post Office’s official website for the latest information.
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Recurring Deposit Interest Rate from Top Banks
The table below shows the different RD rates offered by top banks in India:
| Bank Recurring Deposit | RD Interest Rates (p.a) General Public | RD Interest Rates (p.a) Senior Citizens |
|---|---|---|
| Post Office RD | 6.50% | 6.50% |
| Bank of India RD | 4.50% to 6.00% | 5.00% to 6.50% |
| HDFC RD | 4.50% to 7.25% | 5.00% to 7.75% |
| IDBI Bank RD | 6.25% to 7.00% | 6.75% to 7.50% |
| Yes Bank RD | 6.10% to 7.75% | 6.60% to 8.25% |
| Union Bank of India RD | 5.75% to 6.50% | 6.25% to 7.00% |
| South Indian Bank RD | 5.00% to 7.40% | 5.50% to 7.90% |
| Indian Overseas Bank RD | 5.75% to 7.30% | 6.25% to 7.80% |
| Federal Bank RD | 5.75% to 7.50% | 6.25% to 8.00% |
| DBS Bank RD | 6.00% to 7.50% | 6.50% to 8.00% |
| Indian Bank RD | 4.50% to 7.25% | 5.00% to 7.75% |
| Canara Bank RD | 6.15% to 7.25% | 6.65% to 7.75% |
| IndusInd Bank RD | 7.00% to 7.75% | 7.50% to 8.25% |
| Jammu and Kashmir Bank RD | 5.75% to 7.10% | 6.25% to 7.60% |
| Axis Bank RD | 5.75% to 7.20% | 6.25% to 7.85% |
| Karur Vysya Bank RD | 6.25% to 7.50% | 6.25% to 8.00% |
| Karnataka Bank RD | 5.80% to 7.40% | 6.20% to 7.90% |
| Saraswat Bank RD | 7.00% to 7.50% | 7.50% to 8.00% |
| ICICI Bank RD | 4.75% to 7.20% | 5.25% to 7.75% |
| State Bank of India RD | 6.50% to 7.00% | 7.25% to 7.50% |
| Punjab National Bank RD | 6.00% to 7.25% | 6.50% to 7.75% |
| City Union Bank RD | 6.25% to 7.00% | 6.50% to 7.50% |
| Dhanalakshmi Bank RD | 6.50% to 7.25% | 6.50% to 7.75% |
| Bank of Maharashtra RD | 5.50% to 6.25% | 6.00% to 6.75% |
| Bank of Baroda RD | 5.75% to 7.25% | 6.25% to 7.75% |
| Bandhan Bank RD | 4.50% to 7.85% | 5.25% to 8.35% |
| TMB RD | 6.75% to 7.75% | 7.00% to 8.25% |
Note: The interest rates are subject to change. Do visit the official website for updated rates.
Besides banks, you can also invest in Post Office RD and calculate the return with a post office RD calculator.
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Post Office RD Calculator
A Recurring Deposit online calculator plays an important role in your finances , as it estimates the maturity amount on any given interest rate and/ or tenure. In general, the calculator helps to estimate the maturity amount and total interest earned based on your monthly deposit amounts, maturity period, and prevailing interest rates. An online RD calculator helps you set and reach your financial goals, as you can compare different investment options to find the best deposit amount that can help you reach your goals.
By providing accurate predictions of your financial growth, the RD calculator helps you understand the impact of compounding interest to adjust their savings’ strategy accordingly. The Post Office online RD calculator also saves time and effort by automating the maturity calculations, making it more efficient and an indispensable resource to achieve your savings objectives systematically and effectively.
RD Calculator
You can also manually calculate the maturity amount by using the following formula:
Maturity Value = Deposit × [((1 +r/100)^n – 1 / (r/100)] × (1 + r100)
Here, ‘r’ is the interest rate and ‘n’ is the maturity period
Let’s calculate using an example, to give you a better understanding of the calculation process. Let the deposit amount be ₹5000 per month, tenure is 5 years and interest rate is 6.7% p.a.
In putting the above information into the formula:
=> Maturity Value = 5000 × [((1 +6.7/100)^60 – 1 / (6.7/100)] × (1 + 6.7/100)
=> Maturity Value = 5000 × [((1 +0.01675)^60 – 1 / 0.01675] × (1 + 0.01675)
=> Maturity Value = ₹3,56,829.14
From the above calculation, if the monthly deposit is ₹5000, at an interest rate of 6.7% for a tenure of 5 years, the maturity amount will be approximately ₹3,56,829.14.
(Please note that the calculation given above is just a mere estimation to give you a better understanding of the calculation formula. The maturity amount may differ due to several reasons)
Features & Benefits of Post Office Recurring Deposit
The Post Office Recurring Deposit scheme is a great choice for low-risk investment, offering a reliable and convenient way to grow your savings gradually. Here’s are the key features and benefits of Post Office RD:
- Minimum Investment: The Post Office RD is accessible to a wide range of investors as the minimum monthly deposit is ₹100.
- Flexible Tenure: The maturity period for the National Savings Recurring Deposit account is 5 years, making it a deposit period that is flexible helping you achieve your goals.
- Assured Returns: You can earn a fixed interest rate of 6.7% p.a. on your deposits throughout the 5 year tenure, giving you predictable growth for your savings.
- Compound Interest: The interest for Post Office RD is compounded quarterly, allowing you to earn higher returns on your money.
- Loan Facility: The Post Office offers a loan facility of up to 50% after 12 months against your RD account.
- Nomination Facility: The RD allows you to nominate a beneficiary to receive the RD accumulated amount in case of your unfortunate demise.
- Security: Backed by the Government of India, Post Office RDs are a safe and secure investment option.
- Low Risk: The Post Office RD offers guaranteed returns eliminating market fluctuations, making the RD low-risk and ideal for risk-averse investors.
- Premature Closure: Post Office allows you to prematurely close your RD account after 3 years with applicable penalty charges.
- Account Extension: You can also extend your RD for another 5 years after the maturity period, and it can be withdrawn at any time after that.
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Post Office Recurring Deposit Eligibility
The Post Office recurring deposit is eligible to the following investors:
- A single individual
- Joint accounts of up to 3 individuals
- A minor with the help of guardians
- A person of unsound mind with the help of guardians
- A minor of 10 years old above in their own name.
Loan Against Post Office RD
If you are saving money in a Post Office Recurring Deposit (RD) account for over a year you can get a loan from the Post Office in any case of an emergency.
Here’s how it works:
- You need to have deposited money into your RD account regularly for at least a year, and your account must be active until it matures.
- You can benefit from borrowing up to half the total money you have saved in the RD account.
- Usually, the interest rate on the loan against RD savings will be 2% higher than the interest rate you earn from it.You can choose to repay the loan all at once or in monthly instalments (EMIs).
- You’ll only pay interest for the time you have the loan, from when you borrow the money until you fully repay it. So, it is important to repay before the due date/RD matures else it is a double down with interest.
- To apply for the loan, just go to your local post office with your RD passbook and fill out a loan application form.
To avoid extra/ penalty charges, repay your loan on RD savings at the earliest or by the due date.
Quick Tip: Besides RD, you can also avail loan against fixed deposits.
Post Office Recurring Deposit Premature Closure
If you want to withdraw your funds before your RD matures, you can close your RD account prematurely, but there are a few things to keep in mind. You can only withdraw your RD after 3 years from the date you opened your account. If you close your account before maturity, you’ll lose out on the higher RD interest rate. You will only earn the standard Post Office Savings Account interest rate, which is 4.0% p.a. and is lower than the RD rate which is 6.7% p.a. Additionally, if you made advance deposits for a specific period, such as 1 year, you won’t be able to close the account prematurely until that period is complete.
In simpler terms, there’s a waiting period and a penalty for withdrawing your money early from a Post Office RD account.
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Post Office RD Penalty on Default Payment
In case you missed a payment on your recurring deposit, the Post Office will charge a default payment, these are:
- If you forget to make your monthly RD deposit by the due date, a penalty fee of ₹1 for every ₹100 you were supposed to deposit will be charged. To catch up on missed deposits, you will need to pay the missed amount along with the penalty fee before you can make your current month’s deposit.
- If you miss a deposit 4 times in a row, your account will be discontinued. After which you will have a two-month window from the fourth missed deposit to revive the account by paying all the missed deposits along with their penalty fees. If the account is not revived within this period, the account will remain permanently discontinued and you will no longer be able to make any further deposits.
- If you miss less than 4 deposits, you have an option to extend the maturity period of your RD account by the same number of months that you missed deposits. During this extended period, you’ll need to catch up on the missed instalments along with any applicable penalty fees.
Post Office RD Advance Deposit
The Post Office RD allows you to plan ahead and earn a bonus. For this, you have the option to deposit all your planned instalments in advance for your entire tenure of 5 years. This means you can deposit all your instalments at once if you prefer. Depositing in advance also has a benefit as you get a small rebate from the Post Office as a reward for upfront saving.
To encourage upfront deposits, the Post Office offers a rebate for advance deposit of at least 6 months (including the month you deposit). For instance, if you deposit for 6 months in advance in multiples of ₹100 you will get a ₹10 bonus, while if you deposit for 12 months in advance you will get a ₹40 bonus.
You can make this advance deposit either when you open your RD account or at any time throughout the tenure. This unique flexibility allows you to plan your finances effectively and earn a little extra while saving for your future.
Post Office Recurring Deposit Extension
If you want to extend your RD after maturity, you can for an additional 5 years if you wish to continue saving. To extend the tenure, simply submit an application at your local post office. During the extension period, the interest rate you’ll earn will be the same as the rate you received when you initially opened the account.
After extending your RD, you will be able to close your account at any time. The interest calculation varies based on the duration:
- For complete years after the extension, you’ll earn the regular RD interest rate of 6.7% p.a.
- For periods less than a year after the extension, you’ll earn the standard Post Office Savings Account interest rate of 4.0% p.a, which is generally lower.
If you prefer not to extend your RD, you can choose to hold your matured account for up to 5 years without making any further deposits. During this holding period, your account will continue to earn interest at the RD interest rate.
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