Post Office Recurring Deposit of 5 years provides 7.4% interest rates and it is compounded every quarter. Such saving scheme gives the highest returns compared to bank RD rates. This scheme offers complete security of investments along with attractive returns. Due to their implementation through the post office, they can be run at the places which are geographically difficult to access. In this article, I would provide complete details about 5 Years Post Office Recurring Deposit Scheme. Who can invest in this Post Office Recurring Deposit scheme?
About Post Office Recurring Deposit Scheme
Post office gives the facility to its customers to open a 5 year recurring deposit account in order to add to their savings by investing money which earns interest over a fixed period of time. The deposits have to be made at predetermined intervals which may be monthly, quarterly depending on the terms and conditions of the deposit scheme. This recurring deposit scheme from India Post is an ideal investment for those who cannot invest lump sum money, but does earn handsome interest at the end of the maturity period.
Also Read: Latest Post Office Interest Rates in 2016
Features of the Post Office Recurring Deposit Account
The following are the key features of the India Post Recurring Deposit Account.
- The account is opened for 5 years and can be extended for another 5 years on year to year basis.
- The minimum amount by which the account can be opened is ₹. 10 per month. There is no upper limit to the maximum amount that can be deposited. The deposit needs to be in the multiples of ₹5.
- Any number of accounts can be opened in any post office.
- Accounts can be transferred from one post office to another.
- Nomination facility is available at the time of opening and also after opening the account.
- The account can be opened by cash or cheque. In case of cheque, the date of deposit shall be the date of presentation of cheque.
- If you are depositing your installments through cheque, the date of credit of the cheque into government account shall be treated as date of deposit.
- The account can be opened in the name of the minor and a minor of 10 years and above age can open and operate the account.
- If the depositor is found default in any month, then he has to pay the default money first along with the default fees and then the current month deposit can be made.
- The default fee is charged @ 5 paisa for every ₹. 5 deposited. After 4 regular defaults, the account becomes discontinued. It can be revived in 2 months, but if the same is not revived within this period, no further deposit can be made.
- The rebate is also available if the depositor deposits at least 6 advance installments.
- Single account can be converted into a joint account and vice versa.
- After attaining majority, the minor has to apply for conversion of the account on his name.
- After one year of opening the account, one withdrawal up to 50% of the balance available in your account is allowed.
- If the account has been opened up to 15th of the calendar month, then his subsequent installments can be made up to the 15th day of the next month. And, if the account is opened in the second half of the calendar month, his subsequent last date to pay the installments would be the last working day of the month.
What are the interest rates on the Post Office RD Account?
With effect from 1st April 2016, the interest rate is 7.4% per annum with is compounded quarterly. The interest rates are revised by the government from time to time. As of now, ₹. 10 invested per month for a period of 5 years in recurring term will fetch ₹726.97. Means if you invest ₹ 1,000 per month, you can get ₹ 72,600 after 5 years. If you invest ₹ 10,000 per month, you can get ₹ 7.26 Lakhs after 5 years.
Who is eligible to apply for this Post Office RD Scheme?
1) Recurring Deposit Accounts can be opened by individuals as single or as joint accounts.
2) An RD Account can be opened in the name of a minor. Minor individuals aged 10 years and above can open and operate their RD account.
Can we extend the PO RD Account after 5 years?
Yes. After completion of 5 years, one can extend Post office recurring deposit account for another 5 years on year to year basis.
Does Post office RD Scheme provides tax benefit u/s 80C?
Now you would get doubt about Post Office Recurring Deposit Tax Exemption u/s 80C. One should note that you are investing monthly for 5 years and you have not been investing your money for 5 years. Any investment invested for 5 years (start date to 5 year completion) only qualifies for a tax rebate u/s 80C. Hence Post office Recurring Deposit does not provide tax exemption u/s 80C.
Can we close Post Office RD before maturity?
Partial withdrawals available. One withdrawal up to 50% of the balance allowed after one year.
Also Read: Post Office MIP Scheme offers monthly returns – Should you invest?
Is TDS applicable for PORD account?
Post Office does not deduct TDS for any of its schemes. However, you need to add this interest income every year or at maturity to your income under “income from other sources” and pay income tax based on your income tax slab. Means, PORD interest is not tax free.
Conclusion: Post Office Recurring Deposit scheme is a good scheme where one can save money every month and get handsome returns in 5 years. Since it offers the highest returns compared to bank RD’s, low to medium risk investors can invest in such schemes.
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Suresh
Post Office Recurring Deposit Account of 5 years
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If I deposit 15000 for 5 years how much I will get back. I mean if I deposit in RD
Sir,naanu kannadalli nanna abhiprayavanna/sandehavanna keluttene 1.RD account5varsha katta kattaley beku.haage,eega naavu 5varusha poorti kattaley,2,4,6,1varshada Tanaka katti,anantra kattllivendrey,aaga namage yesterday return Hana barutte?baddi seresi koduttara/naavu yestu tingalu kattiruva hana maatra vaapas barutta!?2.matte,1varusha da nantra 50/:Hana padeyabahudu ante.andrey,tingalege 1000rs kattiddare,varshkke 12000rs aagutte.aavaga naavu yestu persent Hana padeyabahudu tilisi.hana padedaada mele,aantra Baddi siguvudilla antha Jana heluttaralla?!!idu nigaana?dayavittu sariyaada maahiti tilisi Dhanyavaada.
I am sorry, I could not understand your language. Pls post your question in english ?
before 5years, i can withdrew in 3years.
Can I get a link to the form to apply for this
How much money I will get after five years of 500 rupees from post office.
It would b very useful that a readyreckoner is provided showing the rate of interest and the maturity amount for each rs 100 since last 5 years from time to tome as the rates r often changing and common man cannot understand properly
Wat will b the maturity of 3000 rd for 5 years
Wat will b the maturity amt of rd 3000 for 5 years in post office
I have a recurring deposit account in post office, 2000/- monthly for five years, what will be my maturity amount ????
i have a recurring deposit account in post office for Rs.2000/- per month for five years. What will be my maturity amount?
hi sir good afternoon. kindly clarify rate of interest calculation details of explain pls
Nsc is better than Rd if not explain why
Rate of interest on 5 year fd & rd
Hi, Kindly clarify about tax percentage.
I will get 50 lakhs after 22 years,how much amount i will deposit how much amount deposit in postal office.Please send msg sir.Because i have 1 month baby.pls send reply sir.
Same for fd also I want to know if I do 150000 for 3 year then how much I get after 3 year and how much interest. And want to know the calculation also.please suggest, Dear concern ,I m waiting for ur answer…
Dear sir if I do rd of 10000 for 5 year how much I will get after 5 year and I want to know the calculation
I want to know how much interest I will get after 5 year.
Sir,
I have One recurring deposit
a) From Sept 2012 to August 2017 of monthly Rs. 5000
Will you please let me know
1) whether I am elegible for rebate or not as I always deposited for 12 months advance installment.
2) Can it be extended for another 5 years without any further investment
Regards
Hello Sir,
I have two recurring deposit and the details are
1) From Feb 2012 to Jan 2017 of monthly Rs 1200
2)From Nov 2014 to Jan 2017 of Monthly Rs 1000
Could you please let me know what will the total interest I will get for above individual RD.
I will be always grateful to you.
Regards,
Ravi Alok
Kindly also tell me what will be the total amount ( Principal and Interest) I should get from individual RD which is in Postoffice.
I have a post office rd for 5 years for monthly instalment of rs.10000.Is it necessary for me to submit form 15H to concerned po.My annual income from all sources is less than 2 lakhs.Wil on maturity TDS wil be applied.I don’t file tax return as my income is not taxable. Please advise.
Article very much appreciated.Is it necessary to submit form 15H to post office if interest income is more than rs.10000pa.
I bookmarked your site and always wait to see next posts, since i am fresh to this, i need your suggestion, I have a commitment for investment, but I’m not sure how many months/years it take to start, hence i reserved money for that.
Do you suggest a best return plan(> bank FD ROI) for investing, so I invest now and leave, it should allow me to withdraw upon 1-2 months prior notice.
i want to rd 500 rs or 1000 rs per month for 5 year……how much i will get money after 5year
your article is quite clear to understand as I don’t have idea for investment. My child is going to attain age of 2 years in October. Pleas advise me. Thank u!
Hi Varsha, If you are looking to invest money for your child education or for child marriage, you can invest in mutual funds. You can invest as low as Rs 500 per month in each scheme. You can invest in ICICI focussed blue chip fund or Birla SL Frontline fund or ICICI Balanced fund
i want my pf account balance
Quite Comprehensive… Thanks for sharing this
Thank you Vishal
Nice illustration about small saving
thank you dharmpal
Thanks. Can we manage Rd account online? Like deposits etc.?
Dear suresh,Kindly suggest some safe & good retirement plans or schemes.
Sure Ganesh, wait for my article in coming weeks
Thank you for the valuable information about RD in post office.