National Savings Recurring Deposit Account (RD)
- Minimum ₹100/- per month and any amount in the multiples of ₹10/-. No Maximum Limit.
- An account can be opened by an adult in his own name or upto three adults jointly.
- Guardian may open an account on behalf of a minor or a person of unsound mind.
- Advance deposits can be made at the option of the depositor for 6 months or 12 months and earn rebate.
- Account matures in 5 years.
- Withdrawal to the extent 50% of the amount of existing balance is permissible after one year of the opening of account.
- Maturity value allowed on RD accounts restricted to that of ₹100/- denomination in case of death of depositor subject to fulfillment of certain conditions.
- An account can be continued with deposits or without deposits after maturity for another five years.
- Account can be closed prematurely after 3 years with simple interest at the rate of POSA.
A National Savings Recurring Deposit Account is a type of savings deposit account provided by the government of a country. This account allows individuals to save a fixed amount of money regularly over a specific period of time.
The main objective of a National Savings Recurring Deposit Account is to encourage individuals to develop a savings habit and accumulate a significant amount of funds over time. This account offers a safe and secure way to save money and earn interest on it.
Here are some key features and benefits of a National Savings Recurring Deposit Account:
- Fixed Deposit Amount: The account holder is required to deposit a fixed amount of money every month for a predetermined period. The deposit amount is fixed at the time of opening the account.
- Interest Rate: The account earns a competitive interest rate which is set by the government or the respective authority. The interest is calculated on a monthly basis and compounded quarterly or annually, depending on the terms and conditions of the account.
- Flexibility: National Savings Recurring Deposit Accounts offer flexibility in terms of deposit amounts. The account holder can choose the deposit amount based on their financial capacity and convenience. However, there might be a minimum and maximum deposit limit set by the government or the bank.
- Tax Benefits: In some countries, the interest earned on a National Savings Recurring Deposit Account is tax-exempt or eligible for tax benefits, depending on the prevailing tax laws. This makes it an attractive savings option for individuals looking to save taxes.
- Maturity and Withdrawals: Upon completion of the chosen tenure, the account holder becomes eligible to withdraw the maturity amount. The maturity amount includes the principal amount and the accrued interest. Partial withdrawals or premature closure of the account may be allowed, subject to penalty charges and terms and conditions.
Overall, a National Savings Recurring Deposit Account is a convenient savings option for individuals who want to systematically save money and earn interest on it. It promotes financial discipline and helps individuals achieve their long-term savings goals.
5-Year Post Office Recurring Deposit Account (RD)
|Interest payable, Rates, Periodicity etc.
|Minimum Amount for opening of account and maximum balance that can be retained
|From 01.07.2023, interest rates are as follows:- 6.5 % per annum (quarterly compounded)
|Minimum INR 100/- per month or any amount in multiples of INR 10/-. No maximum limit.
(a)Who can open :-
(i) a single adult
(ii) Joint Account (up to 3 adults) (Joint A or Joint B)
(iii) a guardian on behalf of minor
(iv) a guardian on behalf of person of unsound mind
(iv) a minor above 10 years in his own name.
Note:- Any number of accounts can be opened.
(i) Account can be opened by cash/cheque and in case of cheque the date of deposit shall be date of clearance of cheque.
(ii) Minimum Amount for monthly deposit is Rs. 100 and above minimum in multiple of Rs. 10.
(iii) Subsequent deposit shall be made up to 15th day of month, if account is opened up to 15th of a calendar month.
(iv) Subsequent deposit shall be made up to last working day of month, if account is opened between 16th day and last working day of a calendar month.
(i) If subsequent deposit is not made up to the prescribed day for a month, a default is charged for each defaulted month, default @ 1 rupee shall be charged for 100 rupee denomination account (proportionate amount for other denomination) shall be charged.
(ii) If in any RD account, there is monthly default, the depositor has to first pay the defaulted monthly deposit with default fee and then pay the current month deposit.
(ii) After 4 regular defaults, the account becomes discontinued and can be revived within two months from 4th default but if the account is not revived within this period, no further deposit can be made in such account and account became discontinued.
(iii) If there are not more than four defaults in monthly deposits, the account holder may, at his option, extend the maturity period of the account by as many months as the number of defaults and deposit the defaulted installments during the extended period.
(d)Advance deposit :-
(i) If an RD account is not discontinued can made advance deposit up to 5 years in an account.
(ii) Rebate on advance deposit of at least 6 installments (inclusive of month of deposit), for Rs. 100 denomination rebate Rs. 10 for 6 month , Rs. 40 for 12 month
(iii) The advance deposit may be made at the time of opening of the account or any time thereafter.
(i) After 12 installments deposited and account is continued for 1 year not discontinued depositor may avail loan facility up to 50% of the balance credit in the account.
(ii) Loan can be repaid in one lump-sum or in equal monthly installments.
(iii) Interest on loan will be applicable as 2% + RD interest rate applicable to the RD account.
(iv) Interest will be calculated from date of withdrawal to date of repayment.
(v) In case loan is not repaid till the maturity, loan plus interest will be deducted from the maturity value of the RD account.
Note:- Loan can be taken by submitting loan application form with passbook at concerned Post Office
(f)Premature Closure :-
(i) RD Account can be closed prematurely after 3 years from the date of account opening by submitting prescribed application form at concerned Post Office.
(ii) PO Savings Account interest rate will be applicable if the account is closed prematurely even one day before maturity.
(iii) No premature closure of account shall be permissible until the period for which the advance deposits have been made.
(i) 5 years (60 monthly deposits) from the date of opening.
(ii) Account can be extended for further 5 years by giving application at concerned Post Office. Interest rate applicable during extension will be the interest rate at which account was originally opened.
(iii) Extended account can be closed any time during the period of extension. For completed years, RD interest rate will be applicable and for period less than a year, PO Savings Account interest rate will be applicable.
(iv) RD account can be retained up to 5 years from the date of maturity without deposit also.
(h)Repayment on the death of account holder :-
(i) On the death of account holder nominee/claimant can submit claim at concerned Post Office to get the eligible balance of such RD account.
(ii) After sanction of claim, Nominee/legal heirs can continue RD account till maturity by submitting application at the concerned Post Office.