Recurring deposits are a type of term deposit where you invest a fixed amount every month and earn an interest. You can open RD accounts in both banks and post offices, however, in this article we will discuss post office recurring deposits.
Recurring deposit accounts in post offices work very similarly to bank RDs. You have to pay a fixed amount every month without fail and when the tenure ends, you get the principal as well the interest amount.
Let’s look at some salient features of a Post Office recurring deposit -
A minimum of Rs.100/- is to be deposited. Only multiples of 10 can be deposited, however, there is no maximum limit.
Deposits can be made via cash or cheque.
Any person over the age of 10 years can open an RD account. Minors need a guardian to open an RD account.
Higher interest rates for senior citizens.
Safe, accessible, and high interest rates up to 8.40%.
Easily transfer account to any part of India.
Partial withdrawal of up to 50% is allowed after 1 year of account opening.
Premature closure is allowed after 3 years of account opening.
Loan facilities are available for up to 50-90% of the total balance in the account.
A five-year tenure for Post Office RD accounts is stipulated. A certain period of disciplined savings can be guaranteed once the account is opened.
Post Office RD accounts can be opened for a minimum tenure of 5 years.
The account can be extended for a block of further 5 years
It is flexible for savers with different financial capacities and there is no upper limit on the amount that can be deposited each month.
After the date of maturity, an RD account can be maintained permanently without making a deposit.
Premature closure is allowed after 3 years of account opening.
Post office RDs promise competitive interest rates which are mentioned below -
|
Scheme |
Interest Rate |
Compounding Frequency |
|
5-year Recurring Deposit Scheme |
6.70% |
Quarterly |
|
Senior Citizen Savings Scheme |
8.20% |
Quarterly |
You can open a post office RD account online by following these steps -
Download the IPPB application and create an account by entering your PAN, etc.
Enter your mobile number when prompted and verify it with OTP.
Enter your Aadhaar card number and verify it through OTP.
Fill out the form with your personal information, address, account details, and nominee information.
Submit the form to create your post office savings account with a unique customer ID and account number.
Use your customer ID, date of birth, and account number to generate a PIN.
Log into the app, then go to ‘Send Money’ → ‘DOP Products’.
Finally, choose to deposit money into your RD account.
To open an RD account in a Post Office offline, visit your nearest post office and follow these steps -
Request for an RD account opening form and fill it out accurately.
Submit the filled form, the initial deposit amount, and a pay-in-slip form.
Recurring deposits are a great way to save for short and long-term goals. Since you invest a small amount every month, it doesn’t burden you in the present. However, once the tenure is over, you can get the total amount as a lump sum.
The post office is a safe place to keep your money. You can open your account in any post office branch or even manage it online. The flexibility to deposit your funds online and offline makes it convenient to manage your savings the way you like.
A penalty every 5 months on the defaulted amount will be imposed if a deposit is not made.
The best way to do this is to visit your branch and consult.
Yes, they are available at the account opening stage.
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