Post Office Recurring Deposit
About India Post
Commonly referred to as the ‘post office’, the Department of Post, also known as India Post, is the government operated postal system of India. Founded all the way back in 1774, India Post is a part of the Ministry of Communications and Information Technology and offers multiple services to the Indian population like letter post, parcel service, EMS (Enterprise Messaging System), delivery, freight forwarding, third party logistics, insurance, deposit accounts and more.
Recurring Deposit from India Post
India Post offers it’s customers the facility of a 5-Year Recurring Deposit (RD) Account which is essentially a deposit scheme allowing customers to add to their savings by investing money which earns interest over a fixed period of time. An RD is usually opened for a fixed period of time and deposits must be made at predetermined intervals which may be monthly, quarterly, depending on the terms and conditions of the deposit scheme. Unlike a fixed deposit, an RD is not a one-time investment and may be closed before its maturity date. The India Post Recurring Deposit Account is an ideal investment option for first time investors or young professionals as it does not require customers to invest large sums of money towards installments but does earn you handsome interest at the end of the maturity period.
Features of India Post Recurring Deposit
- Customers can open an RD Account with a minimum of Rs 10/- per month or any amount in multiples of Rs 5/-. There is no maximum limit on the amount one may wish to invest each month.
- You can open an RD Account by paying in cash or by cheque. In case payment is made by cheque, the date of presentation of the cheque will be considered as the date of deposit.
- Customers can avail the Nomination facility not only at the time of opening the account but also afterwards.
- You can transfer your Recurring Deposit Account from one post office to another.
- Customers are free to open any number of RD Accounts in any Post Office of their choice.
- Customers making an advance deposit for at least 6 months are entitled to a rebate.
- Customers have the option of converting a Single account to a Joint account and vice versa.
- If the RD Account has been opened by the 15th of a month, then the subsequent deposit to the same can be made up to the 15th of the month. If the account has been opened after the 16th of the month, up to the last day of the month, then the subsequent deposit can also be made up to the last working day of the month.
- After attaining majority, a minor must apply for converting the RD account in their name.
- Customers are allowed one withdrawal of up to 50% of the account balance after one year of opening the account.
- Any delay in deposits will attract a default fee at the rate of 5 paise for every Rs 5 of the deposit amount. If a customer defaults on deposit payments for 4 consecutive times, the account shall be discontinued and can be revived in a period of 2 months. However, if the account is not revived, then no further deposit can be made.
- Recurring Deposit Accounts can be opened by individuals as single or as joint accounts.
- An RD Account can be opened in the name of a minor. Minor individuals aged 10 years and above can open and operate their RD accounts.
The India Post 5-Year Recurring Deposit Account offers an interest rate of 7.3% (as of 1.10.2016) per annum which is compounded quarterly.
Post Office Recurring Deposit (RD) Online Payment
Currently there is no way that post office RD online payment can be carried out from the account holder’s end except through ECS. You can use Electronic Clearing Service (ECS) to ensure that your deposits are paid. However, if you have an agent, he or she can conduct the post office recurring account online payment on your behalf. This is possible through the post office agent portal.
Premature Withdrawal of Recurring Deposit (RD) in Post Office
There could be instances where an individual is cash-strapped and in dire need of money. While it is not recommended to close an RD before its maturity, there is a provision for premature withdrawal of the amount in an RD. Listed below are the important points associated with the premature withdrawal of an RD.
- Premature withdrawal is permitted only after an account has been active for a minimum of 1 year.
- A minimum of 12 monthly deposits should have been made into the account before premature withdrawal is permitted.
- Only one withdrawal is permitted if the above conditions are satisfied. The quantum of such withdrawal should not be more than 50% of all deposits until said time.
- Withdrawal amount can be in multiples of Rs.5.
- Amount withdrawn should be repaid, either as a single lump sum amount or through EMIs.
- Interest should be paid by the individual on the amount withdrawn.
- Amount withdrawn needs to be repaid, with interest, before the RD matures.