There are many national saving schemes working in Post offices. Postal RD (Recurring Deposit) is also a famous national saving scheme.

What is Postal RD Scheme ?

It is a national saving scheme of post offices, in which account holders can deposit some amount on a monthly basis. This scheme may be called the National Savings Recurring Deposit Sch  (Minimum Rs. 10/- or any amount of multiples of Rs. 5/-, No maximum limit)

This Postal RD scheme is also suitable for Indians because Indians have to save money for future purposes.

It is a risk-free national saving scheme that gives interest with a quarterly compounding effect.

What is the eligibility for the opening of Postal RD account in post offices?

There is some eligibility to open RD account in post offices. You can check those as under.

  • An Indian who are over the age of 18 years.
  • NRI and power of attorney holders are not eligible to open RD accounts in post offices
  • Any number of accounts can be opened in any post office by an individual.
  • RD account can be opened in the name of minor and a minor of 10 years and above age can open and operate the RD account. Minor after attaining the majority has been apply for conversion of the account in his name.
  • A joint account can be opened by two adults.

What is the limit for the premature withdrawal of RD account?

The maturity period of the RD account is 5 years but the account can be extended for a further period of 5 years with or without further monthly deposit.

If the account holder wants to withdraw the deposit amount then he can only one withdrawal up to 50% of the deposit balance allowed after one year.

Full maturity value allowed on RD accounts restricted to that of the Rs. 50/- denomination in case of death of depositor subject to fulfillment of certain conditions.

What is the interest rate in Postal RD account in 2021 ?

The interest rate in the Postal RD scheme is 5.8 in 2020. It has been reduced recently by the Government of India. The interest rates are changeable as per the government of India.

Postal RD calculator - how to calculate the interest of an RD account ?

Actually, some fixed amount should be deposited on a monthly basis in his Postal RD account by the depositor. 
The subsequent deposit can be made up to the 15th day of next month if the account is opened up to 15th of a calendar month and up to the last working day of next month if the account is opened 16th day and last working day of a calendar month.

The sum of interest offered on a post office recurring deposit account follows the quarterly compounding principle.

The formula for calculation of interest in RD account 

A= P x (1+R/N) ^ (Nt)

Here,
A= Maturity Amount
P= Recurring deposit
N= Number of times the interest is compounded
R= Rate of interest
t= Tenure

Salient features of Postal RD account

Here I am sharing some silent features of an RD account which are not discussed as earlier.

  1. Advance-deposit facility: There is a rebate on advance deposit of at least six installments.
  2. Account conversion: Single account can be converted into a joint account and vice versa.
  3. If there are more than 4 defaults, the account shall be treated as a discontinued account and can be revived within a period of two months from the month of fifth default.
  4. The account can be revived only if all defaulted installments along with interest up to the month in which the account is revived is paid in a lump sum. After the period of revival is over, no further deposit is allowed in such a Postal RD account.
  5. Fund transfer from IPPB account: User can also deposit or transfer the required amount from his India Post Payments Bank account through online IPPB mobile banking. No need to go personally at any post office.
  6. Nomination facility: The Postal RD scheme offers a nomination facility to users.
  7. It can be availed either at the time of account opening or after the account opening.

Conclusion:

Postal Recurring Deposit Scheme one of the best schemes for Indian people who live in rural areas. They can save some money for their family by deposit some amount of monthly installment.