The Department of Posts has changed the process of its RD maturity payment. Giving information, Indian Post has informed that, it has been receiving several applications from RD or Recurring Deposit account holders regarding the requirement to deposit the outstanding RD loan and interest amount on mature RD accounts in the software platform. After the investigation of the matter, the postal department has made necessary amendments.
Thereafter, the post offices which are Core Banking Solution or CBS enabled will deduct the outstanding RD loan and interest amount from the mature RD account. The amount deducted will be adjusted from the office account at the time of RD maturity payment. In other words, interest on outstanding RD loans or mature RD accounts will not be charged from the account holders at the time of payment of maturity value.
If the loan is not repaid till maturity, the loan and interest will be deducted from the maturity amount of the RD account. Post Office RDs mature in 5 years or 60 monthly deposits from the date of account opening. The account can also be extended for a further period of 5 years by applying to the concerned post office. However, the interest rate applicable during this period will be the interest rate at which the account was originally opened.
Post Office RD account can be maintained without deposit for 5 years from the date of maturity. Loan can be taken on RD accounts after depositing 12 installments and keeping the account in operation for 1 year. The depositor can avail loan up to 50% of the balance amount in the account. The loan can be repaid in a lump sum or in equated monthly installments. Interest on the loan will be applicable at the rate of 2 per cent or as applicable RD interest rate on the RD account.
About Post Office RD Scheme
The post office allows people to invest in the RD scheme. Under the post office RD scheme, you can start investing with just Rs 100 per month. According to the website of India Post, at present, the benefit of 5.8 percent annual interest is available on Post Office RD. Tax is also payable on the interest earned from RD.
