Post Office RD Interest Rates 2024 – Open RD Account Online

India Post Office Recurring Deposit, also known as National Savings Recurring Deposit Account (RD), offers competitive interest rates, making it an attractive option for savings and investment. It is preferred by most investors due to its comparatively higher rate of interest than regular savings accounts provided by Indian banks and its quarterly compounding feature.
Here is a comprehensive guide on Post Office RD Account Interest Rate 2024 and other details that you need to know. 

Post Office RD Interest Rate 2024 (Under ₹2 Crores)

Indian Post Office offers interest at a compounding interval of a quarter. Moreover, the recurring deposit interest rate in post office is subject to periodic changes. 

The primary downside of the RD scheme provided by the Post Office is that it does not offer additional interest rates to senior citizens. Let’s take a look at the table to find out the applicable Post Office RD interest rates. 

Features of Post Office Recurring Deposit Interest Rates

Here are the salient features of the Post Office RD scheme and the applicable interest rates. 

1. Under this RD scheme, individuals can opt for a single or joint account as per their preference and convenience. 
2. A minor below 10 years is eligible to open an RD, only if he/she is under legal guardianship. 
3. You can open an account with cash or a clearance cheque.
4. There is no cap on the maximum amount.
5. You can make an advance deposit of up to 5 years at the time of opening of an RD account in Post Office or any time afterwards.
6. You can avail of a loan facility of up to 50% of the balance amount after 1 year of continued deposits at an interest rate of 2% + applicable RD interest rate.
7. You can repay the loan in a lump sum or EMIs. In case of default in repayment till maturity, the loan amount along with the interest applicable will be deducted from the maturity amount.
8. Tenure of the RD scheme in Post Office can be extended for 5 more years after maturity by applying at the post office.
9. In case of an untimely demise of an account holder, the nominee can claim the eligible amount or continue the RD for the rest of the tenure.

How to Open Post Office RD Account Online?

You can open an RD account in the post office through the India Post Payments Bank, launched in 2018. Just follow the given steps:

• Step 1: Download the app on your device.
• Step 2: Provide crucial details such as PAN ID and contact details.
• Step 3: Verify with the OTP received on the linked mobile number.
• Step 4: Provide your Aadhaar ID and verify with the OTP to proceed.
• Step 5: Fill out the application form with the required details.
• Step 6: Once you submit the form, you will receive your customer ID and account number.
• Step 7: Using the details received and your date of birth, generate a PIN to log in to the app.
• Step 8: Find the “Send Money” option under the Menu tab.
• Step 9: Click on “DOP Products” to deposit in your RD account.

Once you go through the above-mentioned steps, you will be notified about the successful opening of an RD account in Post Office. 

How to Open Post Office RD Account Offline?

If you wish to open an RD account in the Post Office offline, follow the given steps:

• Step 1: Visit your nearest Post Office.
• Step 2: Get a Recurring Deposit form and fill that accordingly.
• Step 3: Submit the duly filled out form along with the required documents, pay-in-slip form, and the initial deposit amount.

A post office representative will process your application form and verify the documents. Upon successful verification, the post office will open your RD account. 

How to Calculate Post Office RD Interest Rates? 

You can calculate RD interest rates in the Post Office either by manually using a mathematical formula or an online RD calculator. Let’s find out how. 

Formula

Here is the formula for RD calculation in post office:

• A= P * (1+r/n) ^ (nt)
• A = amount receivable at maturity
• P = recurring deposit amount that you invest 
• r = applicable interest rate
• n = frequency of compounding
• t = tenure

Let’s understand how this manual calculation works with the help of an example. 

Suppose you have deposited ₹5,000 in your Post Office RD at an interest rate of 6.7% for 5 years or 60 months. 

The amount receivable at maturity would be, 

A = 5000 * (1 + 6.7/4) ^ (4 X 60) = ₹3,56,830.

Alternatively, you can use a Post Office recurring deposit calculator for a hassle-free process and accurate results.

RD Calculator 

Here’s how you use an online RD calculator to determine the maturity value of your RD investment made with the Post Office. 

• Step 1: Enter the amount of monthly investment in an online RD calculator. 
• Step 2: Specify the applicable rate of interest offered by the Post Office. 
• Step 3: Enter the tenure. 

The RD calculator will automatically display the total amount that you have invested along with the maturity value of such investment. 

Eligibility Criteria for Post Office RD Account

Before we dive into more details, let’s find out what are the eligibility criteria to avail the attractive and high-yielding Post Office rd account interest rate. 

1. An applicant must be an Indian Resident of or above 18 years.
2. If minor, must be of or above 10 years.
3. Parents can open an RD account on behalf of their children, if below 10 years of age.

Documents Required for Post Office RD Account 

Along with a duly filled RD application form and 2 passport-sized photographs, you need to submit the following documents to open a recurring deposit at Post Office. 

1. Proof of Identity

• Aadhaar Card
• Passport
• PAN Card/ Form 60 or 61

2. Proof of Address

• Driving License
• Voter ID
• Electricity/Telephone Bill

Post Office RD Premature Withdrawal Rules

The premature withdrawal rules for Post Office Recurring Deposit are outlined as follows. 

• The National Savings RD account allows premature withdrawal after 3 years of deposit. In such a scenario, the Post Office savings account interest rate will be applicable. 
• In case of a premature withdrawal of an RD account, an account holder has to submit Form-2 to the nearest Post Office branch.
• If an individual opts for an advance deposit, premature withdrawal is allowed post the period for which the payment was made.

Post Office RD Penalty

Here are some of the important terms and conditions associated with the Post Office RD penalty that you need to know before making a decision. 

1. Subsequent deposits into the RD account should be made on the 15^th of every month if an account is opened on the 15^th.  Upon failing to deposit instalments by the specified time, account holders are allowed to deposit by the last date of every month.
2. If subsequent payment is not made on the aforementioned due dates, a penalty of ₹1 for each deposit of ₹100 will be applicable.
3. After 4 consecutive default payments, the RD account in Post Office is discontinued and is revivable within 2 months from the last default.
4. If the RD account is not revived within the 2 months, it will remain inactive, allowing no further deposits.

How to Close a Post Office RD Account Online?

If you want to close your RD before its maturity, you can apply for premature closure online. Here are the steps that you need to follow. 

• Step 1: Visit the official banking portal of India Post Office. 
• Step 2: Log in with your ID and password. 
• Step 3: Enter the OTP received on your registered mobile number for verification and click on “Confirm”.
• Step 4: Under the “General Services” tab, click on “Service Requests”. 
• Step 5: Choose “New Requests”. 
• Step 6: Click on “Closure/Pre Closure of RD Accounts”.
• Step 7: Select “Post Office RD”. 
• Step 8: Enter your deposit account number. 
• Step 9: Specify your credit account details and click on “Submit Online”. 
• Step 10: Enter the transaction password on the new page. 
• Step 11: Click on “Submit.” 

You will receive a reference number for making an account closure request. The amount will be credited to your credit account within 24 hours. 

TDS on Post Office RD

Like any other savings instruments, recurring deposits also come under taxation provisions, more accurately, TDS (Tax Deducted at Source). There are two instances of such taxation provisions:

If the PAN details are provided by the account holder, TDS is applicable at a 10% rate. However, the interest earned from Post Office RD is only subject to TDS if the interest income is more than the threshold limit. 

The TDS threshold for general citizens is set at ₹40,000. To simplify, if the interest earned from RD is more than ₹40,000, the bank will deduct TDS as per the applicable rate of 10%. For senior citizens, this threshold is set at ₹50,000.

On the other hand, TDS will be applicable at 20% if the account holder has not provided his/her PAN details. 

Loan Against Post Office Recurring Deposit

Loan against Post Office RD is available for eligible entities under certain conditions. As per the Post Office regulations, account holders need to keep their account active for 12 months without any default to apply for this facility. The facility allows individuals to apply for a loan of up to 50% of their recurring deposit amount to date.

The loan against Post Office RD must be repaid before maturity, either in a lump sum or equated monthly instalments. Failing to repay, the Post Office will deduct the due amount from the maturity amount along with interest.

The interest rate at 2% + applicable RD rate will be levied upon applying for this facility. If the interest applicable exceeds the interest applicable on RD, the account holder needs to pay the difference.

In case of untimely demise of the account holder, the interest will be recovered from the nominee or successor.

Final Word

Post Office recurring deposit interest rate is comparatively higher than most other similar savings options. Moreover, the interest compounded quarterly results in higher returns than other fixed-income investment options.

Although an attractive option, the RD interest rates are subject to change. Hence, make sure to verify the rates and go through all terms and conditions before investing your hard-earned money in the Post Office RD scheme. 

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