Read about information on Post Office Recurring Deposit Account in India.

Post Office Recurring Deposit Account

Recurring deposit account is a systematic way of saving money. The scheme is meant for those investors who want to deposit a fixed amount regularly on monthly basis in order to get a tidy sum after a definite time on the maturity of the account.

How to Open an Account
The Recurring deposit account can be opened at any post office all across India. Currently 7.5% quarterly compounded rate of interest is paid.

Who Can Invest
Period of maturity of account is 5 years. Sixty equal monthly deposits shall be made in an account in multiples of Rs. five subject to a minimum of ten rupees. If it is a joint account, it is paid on maturity
a) jointly or survivor
b) to either of them or survivor

Premature Closure
Premature closure of accounts is permissible after expiry of three years. In case of premature closure of account, the interest at the rate applicable to post office savings account shall be payable.

Taking of Loan
50% of the deposits made in the account may be allowed as loan after the account has been in operation for minimum one year.

Salient Features
Extension and Retention of Account
Post maturity, account holders could decide to continue account for a further period of five years and make monthly deposits during such extended period. The depositors could also decide to continue the account and retain in it the amount of repayment due for a further period upto maximum of five years without making any fresh deposits.

Income Tax Benefits
There is no Tax Deduction at source

Comparison Between Post office RDs and Bank RDs