Post Office Recurring Deposit

Post Office Recurring Deposit is the savings scheme provided by the India Post. Fixed Amount is saved every month using this scheme. Complete guidance about this scheme is given below:

Post Office Recurring Deposit in Tamil Features:

Eligibility:

• A Person above the age of 18 years is eligible to open this RD account.
• Guardians can open the account on behalf of minors.
• Minors above the age of 10 can have an RD account in his/her name.
• Joint accounts holders of up to 3 individuals.
• Individuals must be an Indian Citizen.
• Also, NRIs are not allowed.

Minimum and maximum deposit:

• A monthly minimum deposit is Rs.100.
• A maximum deposit has no limitation.

Tenure:

• The tenure for recurring deposit is 5 Years i.e. 60 months.
• Extend for another 5 years, if needed. Submit the extension application form at the time of closing of the first 5 years. Hence, the extended account gets the interest amount.
• The interest rates will be the same as the opening of RD account rates.
• Closing of the extended accounts allowed within the extended time

Interest Rate:

• Central government of India fixes the interest rate of recurring deposits.
• Also, the interest rate is between 6.5% to 7% on yearly basis and which may vary for each year.
• The current interest rate is 6.7% for both general and senior citizens.

Compound interest:

• The interest rate is on a Quarterly basis and compounded annually.

Premature Closure:

• Closure of the account is only after a minimum of 3 Years (36 months).
• In case of early closure, only the minimum amount of interest is paid along with the deposit amount. i.e. which is less than 3 years of a fixed deposit.
• The post office does not permit to close the account before 3 years. Only in case of emergencies customer’s can close the account with certain formalities.

Maturity Amount:

• The interest amount along with the principal amount is the maturity amount after 5 years.

Transfer account:

• Transfer RD account from one to another post office, if needed. Submit the transfer request form.

Nomination:

• While opening an account, assign the nominees. In case of the demise of the account holder, nominee will get the amount.
• To claim the fund, the nominee needs to submit the claimant form.
• After the approval of the claim, the nominee can continue the RD account till the time of maturity.

Missed Payment:

• In case, missed to pay the installment, the post office collects a small penalty amount as per their rules. i.e. for every Rs.100, Rs.1 is the penalty.
• If failed to pay for more than 4 months, the recurring deposit will become discontinued account.
• Revive the account within 2 months from the 4th default.
• In case of not reviving, the RD account becomes discontinued.

Loan:

• After making the 12 installments in the recurring deposit for the period of 1 year, the customer can avail 50% of its principal amount as a loan.
• Submit the Loan application along with the passbook to the concerned post office to get the loan.
• A single lump sum payment or monthly installment is the loan repayment method.
• If failed to pay the loan amount before the maturity of RD, the loan amount will be deducted from the maturity amount.
• The loan interest rate is 2% + RD interest rates. Generally, the loan interest is applicable from the start of the loan till repayment of the loan.

Tax:

• The income earned in Recurring deposits is subject to tax as per the income tax slab rate.
• Interest earned in the RD is more than Rs.10,000 for the financial year TDS is deducted.

Post Office Recurring Deposit Documents Required:

• Identity proof such as Aadhar Card, Passport, PAN card, Driving License, Voter card, and Ration Card.

• Passport-Size Photograph

Application Process:

Post Office Recurring Deposit Offline:

• Visit the nearest Post office to open the RD account.
• Then, request the officials for the National Savings Recurring deposit form.
• Fill out the required details, and submit the form along with the ID proof, address proof, and deposit amount.

Online:

• Visit the Post office website or e-Banking site.
• Also, Log in using the User ID and Password
• Search for the Post Office Recurring Deposit – RD application form.
• Further, Fill out the details and pay the deposit amount online.
• Submit the form. Thus, will receive the notification for recurring deposits opening by SMS or email.

Post Office Recurring Deposit (RD) is the opportunity to save a fixed amount every month. It helps to save a fund in reliable manner and also, it has great interest rates and tax benefits. Financial goals like education, marriage or housing are achieved using PORD.

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