India Post or Department of Posts offers recurring deposits (RDs) and term or fixed deposits (FDs) under its banking products. While post office recurring deposit (RD) allows customers to save a fixed sum every month and earn an interest income on the same, fixed deposit (FD) requires investor to deposit a lump sum of money for a specific period and avail of features like choice of interest payout. Post office fixed deposit (FD) or time deposit (TD) account offers interest rates across four maturities, according to the official website of India Post- indiapost.gov.in.
Given below are the minimum/maximum amount required, maturity period, interest rates and the maturity period of post office recurring deposit (RD) and fixed deposit (FD):
Minimum/Maximum investment
The minimum amount required for opening a post office recurring deposit account (RD) is Rs 10 per month, according to India Post's website. In case of post office FD, the minimum amount required to open the account is Rs 200. There are no maximum limit on investments in both the cases.
Maturity
The maturity period of post office RD account is 5 years, which can be continued for another five years on a year-to-year basis, according to India Post's website. The post office FD account offers four maturities: one year, two years, three years, and five years.
Interest rate
Post office recurring deposit or RD accounts offer an interest rate of 7.3 per cent per annum. The interest rate on post office RD account is compounded quarterly.
In case of FD, interest is payable annually but is calculated quarterly. The following FD interest rates are applicable on deposits according to India Post's official website - indiapost.gov.in:
| Period | Rate |
|---|---|
| 1yr.A/c | 6.90% |
| 2yr.A/c | 7.0% |
| 3yr.A/c | 7.20% |
| 5yr.A/c | 7.8% |
(As mentioned on India Post's website)
Other features
Post office recurring deposit (RD) account offers the option of premature withdrawal, account transfer and nomination facility. Post office FD account also offers account transfer and nomination facility. Additionally, the investment under 5 years fixed deposit qualifies for the benefit of Section 80C of the Income Tax Act, 1961, according to India Post.
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