Top News

Post Office Recurring Deposit Details: People often save small amounts of money to handle essential tasks, buy a new bike, meet their children's needs, or fulfill small personal wishes. These small monthly savings can become a significant financial cushion in the future. If you are looking for a safe, risk-free way to save money, the Post Office RD (Recurring Deposit) scheme is an excellent option.

For the July-September 2026 quarter, the Central Government is offering an annual interest rate of 6.7% on this scheme, with interest calculated on a quarterly compounding basis. Here is how you can build a corpus of approximately ₹1.5 lakh in 5 years by saving just ₹2,000 per month.

What returns can you expect on a monthly investment of ₹2,000?

If you deposit ₹2,000 per month in a Post Office RD, your returns upon maturity after 5 years would look like this:

Total deposited amount: ₹2,000 × 60 months = ₹1,20,000
Current interest rate: 6.7% (quarterly compounding)
Estimated interest: ₹22,732
Total maturity amount: ₹1,42,732

Since interest is added to the principal every three months in this scheme, your money grows faster compared to simple interest.

Who can open an account and how much can be invested?

You can open an RD account with as little as ₹100 per month. There is no upper limit on investment; you can deposit any amount based on your financial capacity. This scheme is fully backed by the Government of India, ensuring your money remains 100% safe. To open a Post Office RD account, you only need KYC documents such as an Aadhaar card, PAN card, and passport-sized photographs.

Can the RD account be closed before the 5-year tenure ends? If you suddenly require funds midway, the Post Office RD account can be closed prematurely after the completion of three years. However, early closure may result in a lower interest rate as per the rules, thereby reducing your total returns.

What are the tax rules?

Investments made in a Post Office RD do not qualify for tax deductions under Section 80C of the Income Tax Act. Under applicable tax regulations, Tax Deducted at Source (TDS) may be levied on interest income exceeding a certain limit.

Best option for small investors

The Post Office RD is an excellent avenue for the salaried class, senior citizens, and women who save in small amounts to build savings in a disciplined manner. Upon completion of the five-year tenure, the accumulated principal and total interest are transferred to your account.

Disclaimer: This content has been sourced and edited from Money Control. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.