Post Office Recurring Deposit Scheme 2025 – Small Savings, Big Returns!

Post Office Recurring Deposit Scheme 2025 – Small Savings, Big Returns

Are you looking for a safe and consistent savings plan that helps you grow your money with stability and without equity risk? The Post Office Recurring Deposit Scheme is an ideal choice for salaried individuals, housewives, students, and anyone who wishes to build a savings corpus over time with small monthly deposits.

Offered by Post Office under the Government of India, this scheme ensures guaranteed returns with complete security, making it especially suitable for conservative investors and those in rural or semi-urban areas.

What is the Post Office Recurring Deposit Scheme?

The Post Office Recurring Deposit (RD) is a 5-year savings plan where individuals can deposit a fixed amount every month and earn compound interest on their savings. It’s a great way to start financial discipline and gradually accumulate a sizable fund over a few years. RD offers guaranteed returns and is fully backed by the Government of India unlike equity scheme.

Key Features of Post Office RD Scheme

Feature	Details
Interest Rate	6.7% per annum (compounded quarterly) as of Q1 FY2025-26
Tenure	5 years (60 months)
Minimum Deposit	₹100 per month (or multiples of ₹10)
Maximum Deposit	No maximum limit
Compounding Frequency	Quarterly
Premature Withdrawal	Allowed after 3 years with interest penalty
Advance Deposit	Up to 5 years of deposits allowed in advance
Default Penalty	₹1 for every ₹100 for each month of default
Account Transfer	Allowed between post offices

Eligibility Criteria for Post Office Recurring Deposit Scheme

Post Office Recurring Deposit Scheme is open to:

• Any Indian resident individual
• Minors above 10 years (can open an account in their own name)
• Parents or guardians on behalf of minors

Joint accounts (up to 2 adults) are also allowed

How to Open a Post Office RD Account

You can open an RD account at any Post Office branch under Post Office Recurring Deposit Scheme by following these steps:

📌 Step-by-Step Process:

1. Visit the nearest post office or access India Post online services (if available in your region).
2. Fill out the RD Account Opening Form (Form-A).
3. Submit necessary documents:
   • Proof of identity (Aadhaar, PAN, Voter ID)
   • Proof of address
   • Passport-sized photographs
4. Pay the initial deposit (minimum ₹100).
5. Collect your passbook with transaction details

Digital account opening and recurring deposits via IPPB (India Post Payments Bank) are also being promoted.

Benefits of Post Office Recurring Deposit Scheme

These are benefits that make the Post Office RD Scheme is a smart savings option:

✅ 1. Government-Backed Security

Fully backed by the Government of India, making it one of the safest investment avenues.

✅ 2. Compounding Power

Quarterly compounding ensures better returns compared to simple interest options.

✅ 3. Flexible Deposits

Start with just ₹100 per month. Ideal for people with low or irregular income.

✅ 4. No Market Risk

Unlike mutual funds or stocks, returns are fixed and guaranteed.

✅ 5. Premature Closure Option

Available after 3 years with applicable interest penalties.

✅ 6. Loan Facility

You can avail up to 50% loan on your RD balance after 12 deposits.

✅ 7. Easy Transfers

 Tax Implications of Post Office RD

• No tax deduction under Section 80C for deposits in Post Office RD.
• Interest earned is taxable under “Income from Other Sources.”
• TDS is not deducted at source; but income must be declared in your annual ITR.

Premature Withdrawal and Account Closure

There is provision of premature withdrawal and account closure under post office recurring deposit scheme.

• Allowed only after 3 years from account opening.
• Interest payable will be similar to savings account or less than RD rate.

Final maturity amount will be adjusted accordingly.

Frequently Asked Questions (FAQs)

Q1. What is the interest rate of the Post Office RD Scheme in 2025?

👉 The current interest rate is 6.7% per annum, compounded quarterly (valid for April–June 2025).

Q2. What is the minimum and maximum deposit amount?

👉 Minimum deposit is ₹100 per month. There is no upper limit.

Q3. Can I close my RD before 5 years?

👉 Yes, after 3 years of opening the account. But you’ll receive a lower interest rate.

Q4. Is the Post Office RD account taxable?

👉 Yes, the interest earned is taxable. No TDS is deducted, but you must report it in your ITR.

Q5. Can I open a joint RD account?

👉 Yes, joint accounts can be opened by two adults.

Q6. Can I open an RD account online?

👉 Yes, through IPPB mobile banking app or internet banking, if your Post Office savings account is link

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