Post Office Recurring Deposit (RD) scheme is a savings scheme that is very beneficial for regular income people. In this scheme, you can deposit a certain amount every month and after 5 years you get a big fund including interest. This scheme is ideal for those who want to store money for the future from small savings.
Post office is very easy to invest in RD scheme and can be started with minimum ₹ 100. The interest rate of this scheme is currently 6.7% per year, which occurs on a quarterly basis. The scheme is safe and guaranteed returns, which is very attractive for investors. Let us know in detail about this scheme.
Post office recurring deposit scheme observation
The characteristics of the post office RD scheme can be seen in the table below:
| Speciality | Description |
| Minimum deposit | ₹ 100 per month |
| Maximum deposit | No upper limit |
| Interest rate | 6.7% per year (quarterly compound) |
| Maturity period | 5 years (60 months) |
| Expansion option | Extension possible after 5 years and up to 5 years |
| Starting investment | Go to any post office |
| Required documents | Aadhar card and PAN card |
Benefits of investment in post office RD scheme
There are many advantages to invest in post office RD scheme:
- Safe investment: The scheme is completely safe as it is supported by the Government of India.
- Regular savings: In this you can deposit a certain amount every month, which makes your savings a habit.
- Guaranteed Return: This gives you a certain interest rate, which gives sure returns on your investment.
- Flexibility: You can increase or reduce the deposit amount as per your convenience.
- Loan Facility: You can also take a loan against your RD account.
Return for depositing ₹ 1000, ₹ 2000, ₹ 5000 and ₹ 10,000 in Post Office RD Scheme
If you deposit ₹ 1000, ₹ 2000, ₹ 5000 or ₹ 10,000 every month in the post office RD scheme, then we will have to calculate something to know how much returns you will get after 5 years.
Return for depositing ₹ 1000 per month
- Total deposit: ₹ 60,000 in 5 years
- Interest Rate: 6.7% per year
- Return on maturity: around ₹ 71,000
Return for depositing ₹ 2000 per month
- Total deposit: ₹ 1,20,000 in 5 years
- Interest Rate: 6.7% per year
- Return on maturity: around ₹ 1,42,732
Return for depositing ₹ 5000 per month
- Total deposit: ₹ 3,00,000 in 5 years
- Interest Rate: 6.7% per year
- Return on maturity: around ₹ 3,56,830
Return for depositing ₹ 10,000 per month
- Total deposit: ₹ 6,00,000 in 5 years
- Interest Rate: 6.7% per year
- Return on maturity: around ₹ 7,13,660
Documents required for post office rd scheme
To invest in the post office RD scheme you will need the following documents:
- Aadhar card
- PAN card
- Bank account details (optional)
- Address proof
Account opening process for post office RD scheme
Follow the following steps to open an account in Post Office RD Scheme:
- Go to the nearest post office: Go to your nearest post office and get information about RD scheme.
- Fill the form: Fill the required form for opening RD account and submit the documents.
- Start investing: deposit your first deposit amount and start investing regularly.
Tax benefits of post office RD scheme
You can also get tax benefits by investing in post office RD scheme. The interest earned on RD is taxable, but you can get some tax benefits under Section 80C. However, if the interest is more than ₹ 10,000, it may have TDS (tax deducted at source) deduction on it.
Loan facility for post office rd scheme
In the post office RD scheme, you can also take a loan against your account. This feature is available to you after 1 year, when you deposit regularly in your account. You can take a loan of up to 50% of your deposited amount, which is 2% higher than the interest rate of RD.
Post office RD scheme disadvantages
There may also be some disadvantages in the post office RD scheme:
- Regular deposit mandatory: You have to submit regularly every month, otherwise you may have to pay default fees.
- Premature withdrawal: If you close your account before 5 years, you will not get the benefit of full interest rate.
Account transfer for post office RD scheme
You can easily transfer your post office RD account from one post office to another. This feature allows you to move your account anywhere, which makes you easy to continue your investment.
Nomination facility for post office rd scheme
You can also enroll for your account in the post office RD scheme. This facility allows you to designate the beneficiary of your account, so that they can get the benefit of your investment in your absence.
Account expansion for post office rd scheme
The post office RD scheme has a maturity period of 5 years, but you can expand it 5 years. This feature allows you to continue your investment for longer, allowing you to get more interest.
Tax responsibility for post office RD scheme
Post office is taxable interest earned on RD scheme. If your interest is more than ₹ 10,000, it can be deducted (tax deducted at source) on it. You have to declare this interest in your income tax return and pay tax as required.
Interest rate on loan for post office rd scheme
On taking a loan in the post office RD scheme, you have to pay 2% more interest rate than the RD interest rate. This rate is applied to a loan of up to 50% of the amount deposited in your account.
Premature withdrawal for post office rd scheme
In the post office RD scheme, you can close your account prematurely after 3 years. However, if you close the account before 5 years, you will not get the benefit of full interest rate.
Importance of regular deposit for post office RD scheme
It is very important to submit regular submission in the post office RD scheme. If you do not deposit a month, you may have to pay a default fee. Regular deposits make your savings habit and you get more benefit of interest.
Account opening age limit for post office RD scheme
There is no age limit to open an account in the post office RD scheme. Children over 10 years of age can also open an account with the consent of their parents. In addition, an account can also be opened for mentally unhealthy persons, which is operated by their guardian.
Disclaimer: The Post Office RD scheme is a real and government -backed scheme that provides safe and guaranteed returns to investors. The information given in this article is only for general knowledge and understanding, and it should not be considered as any type of financial advice. It would be appropriate to consult your financial advisor before investing.
