- By Shreyansh Mangla
- Thu, 17 Jul 2025 06:33 PM (IST)
- Source:JND
The Post Office Recurring Deposit (RD) Scheme is an official scheme launched by India Post (Bhartiya Dak). It aims to provide a one-stop solution for all the saving needs of a bank account holder. Instead of long queues and chaotic processes typical of depositing amounts in a bank account, the Post Office RD Scheme helps small savers who are beginning their journey of saving for their future. You deposit a fixed amount monthly for 5 years, earning 6.7 per cent interest, compounded quarterly. It's a secure, government-backed plan with easy opening, loan, and partial withdrawal options. In this article, we will discuss the steps on how one can enroll in the Post Office Recurring Deposit (RD) scheme to earn interest on the amount they have deposited at regular intervals.
If you are eager to open such an account, here's what you need to know and the steps you need to take to open a Post Office RD Scheme account:
To Enroll in the Post Office RD Scheme, Follow These Steps:
1. Determine the amount to be deposited each month.
2. As this amount will grow over a period of five years, you will need to deposit a fixed amount at a fixed interest rate to avoid market risks.
3. By depositing the amount, you'll be assured of a good financial base and will start saving regularly.
4. This scheme is especially useful for those who want to turn their small savings into a relatively large amount.
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Post Office RD Scheme: Key Features and Benefits
1. This scheme has a term of 5 years.
2. As of now, the interest rate fixed upon opening the account is 6.70 per cent/year, and interest is added to the amount every three months.
3. Rest assured, there are no risks involved. Once an account holder deposits the amount, it is locked and saved, and the holder is guaranteed to get good returns.
4. One can easily visit their nearby post office.
5. One can start small—even with an amount as small as Rs. 100 per month. One can then add more money to this account in increments such as Rs. 10, Rs. 110, Rs. 120, etc.
6. No Limit: One can deposit as much money as they want; there is no upper limit for depositing an amount in the Post Office RD scheme.
7. The scheme works for everyone, be it a regular employee, a homemaker, or even a small business owner.
8. One also develops a habit of saving money regularly.
When Will the Post Office RD Scheme End?
The scheme comes to an end after five years. Once it matures, you receive all your deposited money back, plus the interest earned.
Who Is Eligible to Open an Account?
Any Indian citizen who is 18 years of age or older is eligible to open an account. Up to three adults can open an account together.
Who Can Open a Post Office RD Scheme Account?
A guardian can also open an account for a child or someone who cannot manage their own money.
A child aged more than 10 years is also eligible to open an account themselves. The scheme allows a period of 8 years (until the child turns 18); they then need to update their details and fill out a new form to keep the account active.
One can also open an account online if they already have a Post Office Savings Account with internet banking facilities.
Important Rules for Deposits
1. You must make a payment when you open a Post Office RD Scheme account.
2. If you open an account before the 16th of the month, you can pay your next installment by the 15th of every month.
3. If you open an account after the 16th of the month, you can pay your next installment between the 16th and the last working day of the month.
4. However, under this scheme, the payee is also penalized slightly "heavily"—for every missed payment, one has to pay Re. 1 for every Rs. 100 they were supposed to pay. If one misses more than four payments, the account might get closed, but it can be resumed after the user makes a repayment of the fixed amount.
5. Pay in Advance: One can even make a deposit for many months ahead (for up to five years), and they might even get a small discount for doing so.
Post Office RD Scheme Loan Facility
After a user makes continuous installments for 12 months (one year) and the account is still active, they also become eligible to get a loan.
6. Post Office RD Scheme Maximum Loan Amount: One can borrow up to 50 per cent of the money that they have deposited as the loan amount.
7. How Can One Repay the Post Office RD Scheme Loan Amount? One can repay the loan amount all at once or in equal monthly installments.
8. Loan Interest: The interest rate on the loan amount is the RD interest rate plus 2 per cent.
9. What Happens If You Don't Pay Back the RD Loan Amount? If you do not repay the loan amount by the time your RD ends, the loan amount and interest will be deducted from the money one receives back from their RD.
