RD is a kind of small saving scheme, anyone can open a recurring deposit account in any post office or bank.
Post office RD can be used as a piggy bank for savings. You keep putting a fixed amount in it every month and you will have a huge amount in your hands when you are mature. RD is a kind of small saving scheme. Any person can open its account in any post office or bank.
Post office RD has a maturity period of 5 years, but R can extend it even further. Any person can start it with a minimum investment of 100 rupees a month. However there is no maximum deposit limit. The post office RD is currently getting 5.8% interest annually, but the interest amount gets added to the principal every 3 months. That is, Quarterly compound interest is found.
Post office RD you can avail income tax rebate of up to Rs 1.50 lakh. If you wish, you can close the post office RD even before the completion of 5 years. However, you will be able to do this only when the RD Account has run for a minimum of 3 years. On the pre-matured exit, you will get interest only equal to the post office savings account.
If you have opened an RD account in the post office and the account has not been paid for several months, then your account will be considered a default. In such a situation, you will have to pay a penalty of 100 rupees. In addition to this, you will have to pay a penalty of Rs.1 on every deposit of Rs.100 to reactivate the account. Along with this, the outstanding amount will have to be paid.
After defaulting 4 times, RD account can be reactivated for 2 months. But if you do not open the account during this period, then it will be terminated and you will not be able to deposit money in it again.
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