1-What is a post office Recurring Deposit(RD) account?

The Post Office RD Scheme is backed by the Government of India. Investors are required to keep their deposits active for at least five years. The scheme allows you to deposit on a regular monthly basis for five years. RD investment is risk free. For those who like investment security and want to earn a steady interest, the Post Office RD is an ideal investment.

2-How to open a post office RD account?

Opening RD account opening is simple. You need to visit the post office and fill out the form to open an RD account. Attach the required documents. Once the form and deposit slip are filled out, you can submit the form at the RD counter in the post office.

3-Which documents are needed to open an RD account?

-Identity Proof: Copy of a government-issued ID such as a passport/voter ID card/driving license/ Aadhaar, etc.

Address proof includes a government-issued ID or recent utility bills, as well as an Aadhaar card.
Two passport-sized photographs.
A Pan Card is mandatory

4-Post office RD account minimum and maximum amount?

Minimum INR. 100/-per month or any amount in multiples of INR 10/-. No maximum limit.

5-RD account maturity period and locking period?

An account can be closed prematurely after 3 years from the date of account opening by submitting a prescribed application form at the concerned post office. Post office saving bank interest is given even if the account is closed before the 1st day of maturity. If an account holder has made an advance deposit, then premature closure is not allowed until the period for which the advance deposit is made.

6-RD account eligibility.

A single adult

B-Joint Account (up to 3 adults) (Joint A or Joint B)

C-a guardian on behalf of a minor

D-a minor over 10 years old in his own name.

7-Is there a tax advantage to RD accounts?

The interest earned on RD account is not exempt from income tax. RD interest income is taxable. Interest earned on RD is considered as 'income from other sources' when you file your IT returns. TDS will be deducted on interest on recurring deposits if the amount exceeds Rs. 10,000 in a single financial year.

8-Is there any rebate for advance payment?

Yes, there is rebate on advance payment of at least 6 installments (inclusive of the month of deposit). For Rs. 100, the installment rebate is Rs. 10 for 6 months and Rs. 40 for 12 months.

9-Is there any partial withdrawal possible?

Yes, partial withdrawal is possible, but the RD account should be in continued condition. Account holders are allowed to withdraw after a year (or 12 installments paid) but not more than 50% of the deposits made into the account.

A withdrawal amount can be repaid at any point of time before the closure of an account. Account holders are charged some simple interest on such withdrawals. If the due advance and interest on advances are not repaid, then at maturity time, such withdrawal is recovered and paid to the depositor, nominee, or legal heirs, as the case may be.

10-Is premature closure possible?

RD An account can be closed prematurely after 3 years from the date of account opening by submitting a prescribed application form at the concerned post office. But the account holder will not receive the RD interest rate on such premature account closure . Instead, the post office will pay you the savings account interest rate.

11-Can we transfer the RD account from one post office to another?

Yes, an RD account can be transferred to another post office.

12-Can we make a RD payment online?

Yes, RD payment can be made online as well, but for that you need to enable your post office online process by visiting your home branch post office.

13-Can we open an account for a minor boy or girl?

Yes, a guardian on behalf of a minor can open a RD account and if the minor is over 10, he/she can open an account in her/his name.

14-Difference between post office RD and bank RD.

For a bank RD account, the term of deposit may vary between 12 months and 120 months, but the post office offers RDs for a tenure of 5 years only.

15-What if the RD account installment is not paid for 2-3 months?

A default is charged for each month that a subsequent deposit is not made up to the prescribed day for a month. A default of 1 rupee shall be charged for a 100 rupee denomination account (a proportionate amount for other denominations shall be charged).

(ii) If in any RD account, there is a monthly default, the depositor has to first pay the defaulted monthly deposit with a default fee and then pay the current month's deposit.

16-RD account nominee rules?

You can nominate during account opening time or even after the opening of the Post Office RD at your ease.

17-RD account death claim rules?

In the case of the death of a depositor in a single account or both in joint accounts, your nominee will not be allowed to deposit in such accounts.

A nominee or legal heir is allowed to withdraw the full value of the RD account as of today immediately.

However, below are some exceptions to it.

If 5 years are completed but not extended, then such an account will be eligible for a savings account interest rate (for the period of the days after maturity).

If less than 5 years have passed, then the nominee will have the right to withdraw the money at the time of maturity. The savings account interest rate will be applicable for such an amount till the maturity period.

In the case of joint accounts, if one holder dies, then the surviving holder can continue the account as usual. However, if the surviving account holder wishes to close the account, then he can close it at any point of time.

In the case of the death of a guardian, the new guardian may close the account at any point of time.

18-Can we extend the RD account after maturity?

If you have completely paid the 60 monthly installments at maturity, then you can extend the account for a further 5 years without any further contribution.