Sudhir SinghUpdated on June 19, 2026
A Recurring Deposit is built for people who cannot set aside a lump sum at once but can commit to saving a fixed amount every month. The Post Office RD has been a trusted savings habit-builder for generations of Indian households, especially in towns and villages where a bank branch is not always nearby but the post office is.
Current Post Office RD Interest Rate
The Post Office RD currently offers 6.7% per annum, compounded quarterly. This rate is revised every quarter by the Ministry of Finance, so always check the latest rate at indiapost.gov.in before opening an account.
Key Features
- Fixed tenure of 5 years (60 months). No shorter or longer tenure option is available for the standard RD.
- Minimum monthly deposit: Rs. 100. No maximum limit, and deposits must be in multiples of Rs. 10.
- Can be opened as a single account or jointly with up to 3 holders.
- Minor accounts allowed, operated by a guardian until the child turns 10, after which the minor can operate it themselves with guardian supervision until 18.
- Nomination facility available.
- Can be transferred from one post office to another anywhere in India.
How Maturity Value Is Calculated
Post Office RD uses quarterly compounding. Here is an approximate maturity value for common monthly deposit amounts over the full 5-year term at the current 6.7% rate:
| Monthly Deposit | Total Deposited (5 years) | Approximate Maturity Value |
|---|---|---|
| Rs. 500 | Rs. 30,000 | ~Rs. 35,800 |
| Rs. 1,000 | Rs. 60,000 | ~Rs. 71,600 |
| Rs. 2,000 | Rs. 1,20,000 | ~Rs. 1,43,200 |
| Rs. 5,000 | Rs. 3,00,000 | ~Rs. 3,58,000 |
Exact maturity value depends on the rate applicable through your full tenure, since rate changes during the 5 years affect quarterly compounding. Use the official RD calculator on indiapost.gov.in for a precise figure based on your start date.
How to Open a Post Office RD
At the Post Office
- Visit your nearest post office with a Post Office Savings Account (open one first if you do not have it).
- Ask for the RD account opening form.
- Fill in your personal details and the monthly instalment amount you wish to commit to.
- Attach Aadhaar, PAN, and a photograph.
- Make your first month’s deposit in cash or by cheque.
- You receive an RD passbook recording your account number, monthly instalment, and tenure.
Online (Through DOP Internet Banking)
- Log in at ebanking.indiapost.gov.in with your Department of Posts internet banking credentials.
- Go to “General Services” and select “Open RD Account”.
- Enter the monthly instalment amount and link it to your savings account for auto-debit.
- Confirm and submit. The RD account is created instantly.
What If You Miss a Monthly Instalment?
A default fee applies for missed instalments:
| Monthly Instalment | Default Fee (per missed month) |
|---|---|
| Up to Rs. 100 | Rs. 1 |
| Rs. 100 to Rs. 500 | Re. 1 for every Rs. 100 |
If you miss 4 consecutive instalments, the account becomes discontinued. You can revive it within 2 months from the date of default by paying all due instalments plus the default fee. Beyond this window, no further deposits are accepted and the account is closed with whatever balance has accumulated.
Premature Closure and Loan Against RD
- Premature closure: Allowed only after 3 years from account opening. The interest paid on premature closure is at the Post Office Savings Account rate (lower than the RD rate), not the full RD rate.
- Loan facility: After 1 year of regular deposits, you can take a loan of up to 50% of the balance in your RD account. The loan interest rate is 2% above the RD interest rate, and the loan must be repaid in a lump sum or instalments before the RD matures.
Post Office RD vs Bank RD vs SIP
| Feature | Post Office RD | Bank RD | Mutual Fund SIP |
|---|---|---|---|
| Returns | Fixed, government-set | Fixed, bank-set | Market-linked, variable |
| Risk | Zero (government guarantee) | Low (DICGC up to Rs. 5 lakh) | Market risk |
| Tenure flexibility | Fixed 5 years only | Flexible (6 months to 10 years) | Open-ended |
| Liquidity | Low (lock-in 3 years for closure) | Moderate | High (open-ended funds) |
Frequently Asked Questions
Can I increase my monthly deposit amount mid-way through the RD tenure?
No. Once you fix the monthly instalment amount at account opening, it cannot be changed for that account. If you want to save more, open a second RD account with a higher instalment amount alongside your existing one.
Is the interest earned on Post Office RD taxable?
Yes. Interest income from Post Office RD is fully taxable as per your income tax slab. Unlike the 5-year Post Office Time Deposit, the RD does not offer any Section 80C deduction. TDS is not deducted on RD interest by the post office, but you must declare and pay tax on it yourself while filing your income tax return.
Can I extend my RD beyond 5 years?
You can extend the account for another 5 years after maturity by giving a written request at the post office, provided the extension is requested within the prescribed time after maturity. The extended period earns interest at the rate applicable at the time of extension.
📩 If you notice any incorrect data in this guide or wish to share additional information, please write to us at info@indiansouls.in.
Over 2000+ Government Schemes & Policies Simplified
Indian Souls is your guide to government Schemes, scholarships, pensions, subsidies, job exams, and more. We break complex schemes into easy steps, helping every citizen take full advantage of the opportunities available.
No jargon. No confusion. Just useful info that helps indian citizen.
![12 Government Schemes for Urban Poor Must Know About [2025 Guide]](https://indiansouls.in/wp-content/uploads/2025/05/image-1.jpg "12 Government Schemes for Urban Poor Must Know About [2025 Guide] - Indian Souls")
%20–%20A%20Complete%20Guide){kind=link}
%202026){kind=link}
%20–%202025%20Complete%20Guide:%20Latest%20Updates,%20How%20It%20Works%20&%20Who%20Qualifies){kind=link}
){kind=link}
