Monday, 4 November 2019

Recurring Deposit Account – India Post, Post Office RD Account, 5-Year Recurring Deposit Account

Recurring Deposit Account – India Post, Post Office RD Account

The Department of Posts is the backbone of the country’s communication. The Department of Post is commonly known as India Post. India Post is playing a crucial role in the country’s socio-economic development. It offers various services to the Indian citizens such as delivering mails, providing life insurance, accepting deposits under Small Savings Schemes, and providing retail services like bill collection etc. In this post, let’s take a look at the Recurring Deposit Account (Post Office RD Account).

Recurring Deposit (RD) Account from India Post

India Post offers a 5-Year Recurring Deposit Account is one of the Small Savings Schemes offered by India Post. RD Account is a systematic and disciplined deposit scheme allowing you to add to your savings that offers guaranteed returns over a fixed period of time. The Recurring Deposit Account is an ideal investment option, where you have to deposit a small but fixed equal amount of money each month for a period of 60 months.

Eligibility for opening a Recurring Deposit Account

1. Recurring Deposit Account can be opened by any resident adult.
2. Joint RD account can be opened by two adults.
3. RD Account can be opened in the name of a minor through guardians.
4. A minor of 10 years and above age can open and operate RD account.
5. Single RD account can be converted into a Joint Account and Vice Versa.
6. Minor after attaining majority has to apply for conversion of the account in his name.

Rate of interest

From 01.10.2019, interest rates are 7.2% per annum (quarterly compounded). On maturity Rs. 10/- account fetches Rs. 725.05. RD account can be continued for another 5 years on year to year basis.

Maturity Period of the scheme

The maturity period of the scheme is 5 years (60 months). The recurring account can be continued for another 5 years on year to year basis with or without further deposits.

Minimum and maximum Amount for the opening of the account

1. Minimum Rs. 10/- per month or any amount in multiples of Rs. 5/-.
2. There is no maximum limit.
3. The subsequent deposit can be made up to the 15th day of next month.
4. The account can be opened by cash/cheque and in case of the cheque, the date of deposit shall be the date of presentation of the cheque.

Number of accounts allowed

Any number of recurring deposit account can be opened in any post office.

Documents Required

Post Office Recurring Deposit Account opening form, PAN card, address proof and ID proof for KYC verification purpose.

Account transfer facility

The account can be transferred from one post office to another.

Nomination facility in RD Account

Nomination facility is available at the time of opening and also after the opening of the account.

Fine and Penalties for Delayed RD Deposits

1. If the subsequent deposit is not made up to the prescribed day, a default fee is charged for each default, default fee @ 5 paise for every 5 rupees shall be charged.
2. After 4 regular defaults, the account becomes discontinued and can be revived in two months but if the same is not revived within this period, no further deposit can be made.
3. If in any RD account, there is the monthly default(s) the depositor has to first pay the defaulted monthly deposit with default fee and then pay the current month deposit. This will be applicable for both CBS and non CBS Post offices.
4. In case of deposits made in RD accounts by Cheque, date of credit of Cheque into Government accounts shall be treated as the date of deposit.

Rebate on Advance Deposit

There is a rebate on advance deposit of at least 6 installments.

Premature Withdrawal from Recurring Deposit account

One withdrawal up to 50% of the balance allowed after one year of opening the account.

What if Depositor Dies

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

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