Post office Recurring Deposit (RD) Interest Rate Calculator 2023


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Post Office Recurring Deposit(RD) Interest Rate Calculator – An Overview

Making investments from an early age is as important as becoming financially independent. And once you have a job, you should start looking for investment options that are suitable for you. And for the newcomers in investment, what can be better than a Post Office RD account, right? As a matter of fact, you can open an RD account in your preferred bank as well. However, many people choose Post Office over banks when it is to open an RD account. The reason behind this is the rate of interest. The Post Office RD interest rate 2022 is 5.8% per annum.

Rate of Interest 5.8% per annum. It is compounded quarterly.
Tenure 5 years. Can be extended for the next 10 years upon completion of the first 5 years.
Minimum deposit INR 100 p.m.
Maximum deposit There is no upper limit
Penalty for missed deposit INR 1 for every INR 100

Eligibility to Open a Post Office RD Account in India

One needs to meet the following criteria to open an RD account in a Post Office.

  • You have to be an Indian national and have to be 18+ years old
  • A minor has to be 10+ years old to open an RD account

In the case of a minor account holder, the account has to be operated jointly with their guardian.  A minor cannot handle the account single-handedly.

What is the Recurring Deposit Tenure?

Recurring Deposit is mostly opted for by working-class people. It is considered a medium-term investment option. The majority of people open an RD account to secure their immediate future. If you are planning to invest your hard-earned money in an RD account, you have to make the deposits for the next five years without fail. The minimum period of Post Office Recurring Deposit is 5 years.

Once your tenure is over, you may extend the period if you wish to. India Post enables the customers to extend the tenure of the RD accounts. However, you also need to know that the extendable period is a maximum of 10 years and not more than that. Also, when you extend the tenure of your RD account, the calculation of compound interest for each quarter remains the same.

Features of Post Office RD Account

While we consider opening an RD account, we need to know the features of this kind of account. So, here are some of the features mentioned below:

  • The minimum tenure of an RD account is 5 years. However, upon the completion of the tenure, you can extend the tenure of the RD account for a maximum of the next 10 years.
  • For the current fiscal year, the RD interest rate offered by India Post is 5.8%, which is compounded quarterly.
  • An RD account can be opened in the Post Office for a maximum number of 2 persons.
  • If you make advanced deposits for a minimum of 6 months, you will be able to get a rebate.
  • If you miss out on the payment of the deposit for the Post Office RD account, you will be required to pay INR 1 for every INR 100 as a penalty.
  • The minimum amount of deposit can be INR 10 in this type of account. However, there is no upper limit for deposits.

A Post Office RD account can be transferred from one Post Office to the other.

Read More: Post Office Monthly Income Scheme

How to Calculate Compound Interest on Post Office RD?

The formula used to calculate Recurring Deposit (RD) is:

M = R x {(1 + n) x n – 1} / 1- (1 + i) (-1/3)

In the above formula:

R is the amount deposited per month.

n is the number of quarters in the tenure.

i is the rate of interest divided by 400 (for 4 quarters in a year).

M is the maturity amount.

Recurring Deposit Dates

  • For the minimum tenure of 5 years, you have to make at least 60 deposits in that tenure. This means, for 5 consistent years, you will be required to make monthly deposits.
  • The first deposit has to be made when you open the account for the first time. The next deposit has to be made on the decided date or on the date when your account was opened.
  • The deposits that you make in one such account will come with a grace period. For example, if the account was opened between the 1st and 5th of a month, the next deposits for the next 5 years will have to be made between the 1st and 5th of every month.
  • If the RD account was opened after the 15th of a month, the deposit has to be made between the 16th and the last date of that month. And, the deposit cycle will be like this for 5 consistent years.

Penalties on Delayed Recurring Deposit (RD) Deposits

Not all days are the same for us. And it is quite normal that an account holder is not able to deposit in a month because of some kind of financial crisis. Well, in that case, as per the Post Office RD rules, you can make such defaults a maximum of 4 times. Upon crossing the 4-time limit, your account will be inactive. The account can be revived within 2 months. Going by the Post Office RD rules, for each INR 100, you would be required to pay INR 1 as a penalty. The penalty has to be paid besides the regular deposits.

Premature Withdrawal on Recurring Deposit (RD)

In case you need money and you want to withdraw it from your Post Office RD account, it is possible. However, to make this happen, you would be required to keep your account active for a minimum of 1 year. You also need to know, that only 50% of the available amount can be withdrawn from your RD account. You have to repay the amount that you withdrew. The repaid amount has to be deposited in a lump sum amount and the interest rate will be applicable. As the rate of interest for the withdrawn fund is concerned, it will be the current interest rate.

Now that you have enough information about the Post Office RD scheme, you can start searching for the nearest Post Office to your place. You can also use a Post Office RD calculator to find out the amount that you have to deposit every month. This calculator is an online tool and you can find it on many websites.

Also read: 6 Post Office Saving Schemes, Saving Plans for Boy Child in India 2022

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Jul 01, 2022
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