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How To Open A Recurring Deposit In The Post Office?

Updated On Mar 02, 2022

In comparison to banks, the Post Office Recurring Deposit has traditionally been a popular investment option for investors. It is a safe and secure savings account that allows investors to build money over time. One of the main reasons for its popularity amongst investors has been that it offers a competitive interest rate as well as a guaranteed return at maturity.

For individuals who seek stability in their investments and wish to earn a constant quantity of money, the Post Office RD will be an excellent choice. Furthermore, this strategy would be beneficial to people who desire to make a set amount of money over a set period of time and have a consistent income. To get to understand more on the Post Office Recurring Deposits (RD), read on.

What Is The Eligibility Criteria Of Post Office Recurring Deposits (RD)?

The following are the listed requirements for opening a Post Office Recurring Deposits account -

  1. Candidates have to be Indian citizens who are at least 18 years old.
  2. Minors who have turned 10 years old.
  3. Minors' parents or guardians can make an account upon their behalf.
  4. The RD account for children will primarily be handled by guardians or parents, but the RD account for candidates above the age of 18 will indeed be held in the name of the lead applicant.

What Are Some Of The Features Of Monthly Recurring Deposits (RD) At The Post Office?

Following are some of the notable features of Post Office Recurring Deposits - 

  1. RESTRICTIONS ARE MINIMAL - An RD account may be opened with as low as Rs.10 per month and there is no maximum limit. Applicants can open their RD account at a post office and deposit cash or a cheque.
  2. OPERATIONS - The RD can be managed jointly if it was formed in the name of a minor. If indeed the account is created by either an adult over the age of 18, the primary applicant can control the account singly or jointly.
  3. NOMINATIONS - In the case of their death, applicants might choose a nominee to collect the compensation. Investors can choose the nomination option while creating an account at the post office. Well after the account has indeed been opened, they can do so.

What Is The Tax Rate On Recurring Deposits (RD) At The Post Office?

People can seek a tax exemption of up to Rs.1.5 lakh per year under Section 80C of the Income Tax Act, which specifically excludes the Post Office RD account from tax deductions. On the other hand, interest income through the Post Office RD will indeed be eligible for tax reduction. According to their income tax bracket, bank customers would have to pay tax on the money earned. Apart from that, any interest over Rs.10,000 would be subjected to TDS deductions, with others with an active PAN card actually paying TDS at a rate of 10% from those without an active PAN card having to pay TDS at a rate of 20%.


A range of secure investment choices are available through the post office banking service. All of these projects are backed by a sovereign guarantee, indicating that they are backed by the government. As a consequence, these programmes are safer investment options for consumers than corporate stock and a variety of fixed-income investments. A regular deposit is the most effective strategy to develop the habit of saving since it may help you build a financial buffer and attain your long-term objectives. Furthermore, the post office recurring deposit account enables to achieve a guaranteed return on investment with a little deposit amount thanks to its high interest rate. However, if you want to invest for the long term and earn larger returns, you should explore products such as bank FDs, mutual funds, and so on.

Also Read: Benefits Of Purchasing ICICI Prudential Life Insurance Policy

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.

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