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What is Post Office Recurring Deposit Scheme?

Published: 21st Jun, 2022


Regarding minor savings deposit plans in India, India Post provides nine savings plans with interest rates of 7.2 percent annually on recurrent deposit (RD) accounts.


  • India Post operates across a network of more than 1.5 lakh post offices in the country and provides a variety of banking services.
  • Recurring deposit (RD) accounts, one of India Post's nine savings plans, with an annual interest rate of 2 percent.
  • Over a certain time period, small savings devices assist individuals in reaching their financial objectives.
  • The government's modest savings program interest rates, which are updated weekly, are followed by the interest rates on these post office savings plans.

What is a Recurring Deposit (RD)?

  • A recurring deposit is a type of term deposit.
  • Unlike a fixed deposit account, a recurring deposit account allows the investor to park a fixed amount of funds at regular intervals; for instance, every month.

How to open a recurring account (RD)?

  • Both cash and checks can be used to start a post office recurring deposit (RD) account. According to India Post, when it comes to checks, the date of deposit equals the date of presentation.
  • A post office allows the opening of an unlimited number of RD accounts.
  • A minor's name may also be used to create an account. An adult under the age of ten may open and manage the account.


  • The post office RD account has a five-year maturity term. On an annual basis, it may be extended for an additional 5 years.
  • Any sum in multiples of Rs 5 can be established with a minimum monthly opening deposit of Rs 10.
  • The amount invested in post office recurring deposits (RDs) has no upper limit.
  • After a year, you can withdraw up to 50% of the sum in one go.
  • On any day of the month, the monthly contributions ought to be credited.


  • Throughout the duration of the account, the withdrawal amount must be reimbursed in full, plus interest at the specified rate.
  • A default occurs when a monthly installment is not paid.
  • According to India Post, if there is a monthly default amount in any RD account, the depositor must pay the defaulted monthly deposit together with the default cost before paying the current month's deposit.

Small savings schemes in India

  • The small savings instruments include
    • Public Provident Fund Account (PPF)
    • SukanyaSamriddhi Scheme
    • Senior Citizen Savings Scheme
    • Post Office Savings Account
    • 5-Year Post Office Recurring Deposit Account (RD)
    • National Savings Certificates (NSC)
  • In India, they constitute the primary source of family savings.
  • Three categories apply to the basket of modest savings plans. Among these are:
    • Postal deposits: National Savings Time Deposit Account (TD), National Savings Recurring Deposit Account (RD), and Post Office Savings Account (SB).
    • Savings certificates: Kisan Vikas Patra (KVP), National Savings Certificates (VIIIth Issue), etc.
    • Social security schemes: Senior Citizens Savings Scheme (SCSS), Public Provident Fund (PPF), and so on.
  • The government reviews interest rates for these plans every quarter.

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