Post Office RD Interest Rate: People here deposit a lot of money in the post office. The investment made in this is considered very safe. You can get safe and good returns by investing in post office schemes. Today we are talking about the Recurring Deposit Account of the post office. In this you can easily deposit money.
What is RD account of post office
Post Office Recurring Deposit Account (RD Deposit Account) is a scheme for depositing small amounts. In this, the investor deposits a pre-decided amount every month in installments. It is a government guaranteed scheme for small deposit with better rate of interest. In this, you can start investing with a small amount of just Rs 100. In this, the amount can be increased in multiples of Rs.10. There is no upper investment limit in this account. So you can deposit as much money as you want in this account.
How many days money has to be deposited
If you open an RD account in the post office, it will be for five years. If you want to extend it, then after five years you can extend it for another five years by giving an application to the postmaster. If you want to open a similar account in any bank, then you can also get the option of six months, 1 year, 2 years and 3 years. The good thing is that the interest on the amount deposited in Recurring Deposit or Recurring Deposit accounts is calculated every quarter (at an annual rate). Therefore, whatever interest accrues on your deposit is added to your account (with compound interest) at the end of every quarter.
What is the interest rate in post office RD scheme
If you open an account in RD scheme in a post office, then this deposit scheme will be considered as a small savings scheme of the Government of India. The Finance Ministry of the Government of India decides how much interest will be available in the Small Savings Scheme. The Union Ministry of Finance declares the rate of interest for all small savings schemes every quarter. The Finance Ministry has fixed an interest of 5.8 per cent on the post office RD scheme for the fourth quarter of the current financial year.
If you deposit 10 thousand every month, how much will you get
Suppose that if you deposit 10 thousand rupees every month in the RD scheme of the post office. You deposit this amount continuously for 10 years. So after 10 years you will get 5.8% return. On maturity, this amount will exceed Rs 16 lakh. Understand it this way..
Amount deposited every month – Rs 10,000
Tenure – 10 years
Interest rate – 5.8%
Amount received on maturity after 10 years – Rs 16,28,963
Advance can also be deposited in the account
You can also deposit money in advance in the RD scheme of the post office. If you have opened an account and want to continue it, you can deposit the money in advance for the entire five years. By doing this you will also get some rebate. Suppose you open an RD account of Rs 100 per month and deposit at least six installments in advance, then you will get a rebate of Rs 10 for the first six months. Similarly, a rebate of Rs 40 will be available for 12 months.
Avoid default
If you have opened a recurring deposit account in the post office, then you have to make sure that you deposit money every month. If for any reason you do not deposit money in your account for a month, then you will have to pay a penalty. The amount of penalty will depend on the delay in depositing the money. After the number of months you have deposited the money, you will have to pay a penalty of one percent every month. Also note that your account will be closed if you don’t deposit 4 consecutive installments.
Will income tax also apply?
Yes, income tax is also applicable on Post Office RD or Recurring Deposit Account. Income tax is deducted in the form of TDS on the interest received in the account. But, it will be deducted only if the deposit amount is more than Rs.40,000. If your deposit amount is this much then you will be taxed at the rate of 10% per annum. The interest earned on RD is also taxable, but the entire maturity amount is not taxed. Investors who do not have any taxable income can claim TDS exemption by filing Form 15G, as in the case of FDs.
Can I close the account prematurely?
You can also close the post office RD account prematurely. There is an exemption for this. But you can do this only if three years have passed since the account was opened. On completion of three years, you can get it prematurely closed by giving an application to the postmaster. In such cases, the interest rate of Post Office Savings Account Scheme will not be payable to you, but the interest of RD scheme. If you have deposited money in advance, then you will not be allowed premature closure.
