Post Office RD Account Details: Recurring Account Details

The post office RD account (Recurring Deposit) scheme is one of the nine (9) small savings plans supported by the government of India. This scheme serves as a medium-term investment option, where investors must keep their deposits active for at least five years.

RD being risk-free, the system offers prudent and inexperienced investors the opportunity to invest a fixed amount of funds regularly. Depositors earn interest on their deposit, which is made up quarterly.

Besides giving interest, RD also provides tax benefits. 

RD Account Post Office

RD Account Details in Post Office 

In addition to the development of courier services, post offices offer their customers various financial schemes in the shape of savings and life insurance plans.

The savings plan extended by post offices is a risk-free investment option. The post office RD account is part of these extended savings plans for the general public.

Typically, a recurring deposit (RD) post office scheme is one of the most popular savings alternatives to traditional fixed deposits and other long-term programs offered by post offices.

Who is Eligible to Open RD? 

People who wish to open the post office RD account must meet these criteria:

  • Citizens of India over the age of 18 can individually or jointly open an RD account. 
  • Minors who are above ten years of age.
  • Custodian or parents who wish to open and manage a minor’s account on their behalf.

The security of investing in an RD account at the post office and the ability to earn compound interest on it make this system feasible.

People who earn a fixed income but wish to generate wealth over time can consider the post office recurring deposit plan effective and adequate. So investing under this plan can benefit the depositor.

What are the Advantages of Recurring Deposit?

Post office RD scheme features make the savings plan an attractive investment option.

Easy Deposits 

People can open the post office RD account by check or cash. People having an RD account must deposit a minimum of Rs.10 each month. There is no upper limit on the amount of investment that can be made.


RD scheme offers depositors a reasonable interest rate. The sum of interest is capitalized quarterly and allows people to generate better income. Thus depositors can generate a good amount of interest on their deposits. 


Account-holders can manage their account individually or together. In the case of a joint account, two adults can jointly manage their RD account at the post office. However, if one of the account holders is above ten years, they can manage the account associated with their custodian.

So depositors can manage their accounts individually or jointly.

Nomination Facility 

The RD scheme offers the possibility of taking advantage of a nomination facility. An account holder can opt for such a facility when opening an RD account at the post office. They may also decide to go easy with nomination after opening their account under this scheme.


People having an RD account can take advantage of the discount facility on their advance deposits. But this facility is limited to 6 installments only. Thus account holders can avail of the rebate under this scheme.

Ease of transfer

Recurring deposit (RD) account holders can easily transfer funds from their RD at the post office. They also can open more than one account at various post offices.

Post RD Withdrawal Facility

The recurring deposit scheme allows people to withdraw their deposits without any problem. After one year of opening the account, they can withdraw up to 50% of the deposit amount.

Also Read: India Post Speed Post Timing: Domestic and International

What is the RD Interest Rate in Post Office?

The RD scheme interest rate offered is 5.80% per annum. This interest rate makes it one of the most popular investment options.

Besides, compound interest extended each quarter is a highly desired benefit of the system. The scheme ensures that people have a powerful aggregation available to them when the scheme matures.

This characteristic would directly contribute to creating wealth and ensure financial stability for the following years.

How are Taxes Applied to a Post Office RD Account?

Post office RD account falls under the tax exemption in section 80C. People can claim up to Rs. 1.5 Lakh according to the annual tax exemption under this section.

However, the interest generated by the post office under the RD scheme is subject to tax.

RD account holders have to pay tax based on their income tax slab—besides, any interest more than Rs. Ten thousand (10,000) would be responsible for a TDS (Tax Deducted at Source).

RD account holders having active PAN would pay TDS at a rate of 10%, while those without active PAN would pay TDS but at a rate of 20%.

Rebate Facility on Post Office Recurring Deposit?

Post office offered rebate (discount) facility to RD account holders to encourage them to deposit money into their accounts on time.

However, in the case of the post office RD scheme, account holders can avail rebates on their deposits invested at least six months in advance. Besides, these rebates are available in the form of a deposit of at least six installments.

Post Office RD Premature Withdrawal

RD account holders can access their recurring postal deposits and finance their urgent needs. But up to 50% of the available funds can be withdrawn from this account only one year after opening. A simple interest rate would apply to withdrawn funds.

The post office recurring deposit scheme is a feasible investment option for people looking to save money in the short term.

However, short-term mutual funds can offer a much higher return but with some risks. Short-term mutual funds are better equipped to allow people to achieve their short-term financial goals with strategic market-related investments.

When choosing the best mutual funds for short-term investments, take advantage of professional assistance to get the best possible returns on your investment and create a larger fund in less time.


Post office RD account is a small savings scheme available to all Indian citizens to make savings for the future. You can open an RD account in any post office by cheque or cash, and the minimum amount for running the account is Rs. 10/ month. 

Besides providing a reasonable interest rate, RD also saves tax on investments. Indians above 18 years can jointly or individually open RD accounts. Parents or guardians can also open this account on behalf of their minors above ten years. 

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