Post Office RD {New} Complete Detail *Latest Updates*

Post office RD (Recurring Deposit) is a monthly investment scheme. You can deposit any amount to post office RD account to get interest on it. It has maturity period of 5 years. After completion of 5 years you will get your amount with interest. We will discuss here all about post office RD account like interest rates, maturity period, calculation, premature closure, loan amount on Post Office RD etc.,

Updates on 06-07-2020:  Post office recurring deposit (RD) account holders can deposit the instalments for the months of March, April, May and June, 2020 in their RD account till July 31, 2020 without paying any revival fee. Further, these RD holders will not have to pay default fees. Usually, in case of non-deposit into an RD account, a default fee/revival fee is charged.

Updates on 03-07-2020: There is some good news for fixed income investors: the government has decided to keep the interest rates on small savings schemes or post office schemes unchanged for the July-September quarter of FY 2020-21. This was announced via a Department of Posts circular dated July 1, 2020.

Difference Between Old and New Scheme

There is very less change between old and new Post Office RD scheme. But other post office schemes have various changes w.e.f. 12.12.2019.

Basis of DifferenceOld SchemeNew Scheme w.e.f.12-12-2019
Interest Rate7.2% p.a7.2% p.a.
Maturity Period5 Years5 Years
Premature ClosureAfter 3 Years from the date of opening of accountAfter 3 Years from the date of opening of account
Joint Account AvailabilityYesYes
Number of Accounts AllowedNo limitNo limit
Minimum Investment AmountRs.10 and in multiples Rs.5 thereafter subject to min Rs.10Rs.100 and in multiple Rs.10 thereafter
Maximum InvestmentNo limitNo Limit
Deduction u/s 80CNot AllowedNot Allowed
Tax Provisions of InterestInterest is Taxable under the head of “Income from Other Sources”. However deduction u/s 80TTB is available upto Rs.50,000 for only senior citizensInterest is Taxable under the head of “Income from Other Sources”. However deduction u/s 80TTB is available upto Rs.50,000 for only senior citizens

Rs.1000 Monthly Investment Maturity Amount

  • Monthly Investment: Rs.1000
  • Interest Rate: 7.20%
  • Period: 5 Years
  • Maturity Amount: 72,314/-

Post Office RD Interest Calculation

  • Interest on deposits made under this scheme is calculated on basis of tenure of the deposit (1 Year, 2 Years, 3 Years, 5 Years).
  • Compounding of interest is made on quarterly basis.
  • Interest is payable annually at the end of each year.
  • No additional interest is payable on the interest which has become due but not withdrawn by the account holder.

Post Office RD Quick Features

Maturity Period5 Years
Deposits Period60 Months
Interest Tax Benefitsup to Rs.50,000 u/s 80TTB
Tax Benefits on InvestmentNot Available (Section 80C)
Who Can Open AccountAny Resident Citizen of India
Joint Account AvailabilityYes
Number of AccountsNo Limit
Minimum AmountRs.100 (w.e.f. 12.12.2019) or any sum in multiple of Rs.10
Advance Deposit OptionsYes Available
Interest Rate7.2%
Premature ClosureAvailable
Loan AvailabilityAvailable

Post Office RD Tax Benefits

  • Only Senior Citizens who is the age of 60 years or more can get the deduction under section 80TTB.
  • The deduction amount is of Rs.50,000.
  • The deduction under section 80C is not available for deposit amount.

Who Can Open Post Office RD Account?

The following persons can open post office RD account.

  • Any resident citizen of India
  • A single adult
  • 3 adult jointly
  • A guardian on behalf of a minor
  • A minor who has attained the age of 10 years on his own name

How to Open Post Office RD Account?

  • You can open the Post Office RD account only in Post office by filling the application form i.e. Form-1.
  • You can not post office RD in any nationalized or private bank.
  • The banks has its own RD account but not on the terms and conditions of post office. You can say that the banks will not pay the interest as post office pays.

Important Links

Official Website of Post Office RDClick Here
Post Office RD CalculatorClick here

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