Post Office Saving Schemes: Recurring Deposit (RD) Compared To Monthly Income Scheme (MIS)
India Post, under the Department of Posts, which runs postal services in the country, also offers banking facilities. Besides allowing customers to open a savings account like banking peers, post offices also offer a number of saving schemes. Two such products offered by Post office are recurring deposit (RD) and monthly income scheme (MIS). Interest rates on these post office saving schemes move in line with the government's interest rates on small savings schemes, which are revised on a quarterly basis
Given below are features of post office recurring deposit (RD) and monthly income scheme (MIS):
| Particular | Post Office RD | Post Office MIS |
|---|---|---|
| Maturity | The maturity period of post office RD account is 5 years. However, it can be continued for another five years on a year-to-year basis. | The lock-in period for Post Office MIS is 5 years. |
| Minimum Amount | It can be opened with a minimum of Rs 10 per month or any amount in multiples of Rs 5. | The minimum amount required to set up a monthly income account is Rs. 1,500. |
| Upper Limit | There is no maximum limit on investment. | Maximum investment limit is Rs. 4.5 lakh in single account and Rs. 9 lakh in joint account. |
| Interest Rates | Currently it offers an interest rate of 7.3 per cent per annum with quarterly compounded. | Investment in the post office Monthly Income Scheme fetches interest at the rate of 7.7 per cent after maturity |
| Premature Withdrawal | One withdrawal up to 50 per cent of the balance is allowed after one year in case of a post office recurring deposit account. However, it should be repaid in one lump-sum along with interest at the prescribed rate at any time during the currency of the account. | The account can be prematurely en-cashed after one year. However, if it is en-cashed before three years, the post office deducts 2 per cent of the deposit. If you en-cash it after 3 years, 1 per cent of deposit is deducted. |
(As mentioned on India Post's official website- indiapost.gov.in)
Other saving schemes offered by post office are time deposit (TD), senior citizen savings scheme (SCSS), 15 year public provident fund (PPF), national savings certificates (NSC), kisan vikas patra (KVP), and sukanya samriddhi accounts.