Post Office Recurring Deposit why a good option for long-term Investments

Post Office Recurring Deposit Scheme launched by Indian Post Offices is a deposit scheme where customers can invest money periodically which gains interest over a certain period of time and adds more into savings. In this article, we’ll discuss the features offered by this scheme.

A good option for long-term investments

The scheme has a minimum tenure of five years. However, the account can be extended for further five years after the certain procedure, therefore, the maximum tenure that this scheme can serve is ten years making it a considerable option for people looking for long term investment.

Transfer Facility

Accounts offered under this scheme can be transferred by one post office to another anywhere in the country. Hence, there is the ease of transfer in the scheme.

Nomination Facility

Nomination facility can be availed by the customers at the time of opening an account and also after opening the account.

Easy payment to Open an A/C

Customers can open the account under the scheme by paying in cash or by cheque. In case the payment is done by cheque, the date of deposit is considered to be the date of presentation of the cheque.

High-interest Rate

The Post Office RD scheme is known to offer usually higher rates of interest than most of the other schemes. The interest is compounded quarterly and benefits the customer by adding more to the savings.

Negligible restriction on Payments

The minimum amount considered for an opening account or maximum amount that could be retained is considered to be Rs. 100. There is no maximum limit set for investing.


The account can be opened individually or jointly. Incase of the joint account, maximum account holders are limited to three. The account can also be opened on behalf of minors by parents/guardians. Minors after attaining the age of ten years can also manage the account in association with parents/guardians. Also, any number of accounts can be opened from any post office, there is no limit set as such.


Indian nationals who are over 18 years are eligible for getting benefits of this scheme.

Premature Withdrawal

In any kind of emergency, the account holder(s) can withdraw the amount prematurely following certain terms and conditions. Premature withdrawal for once can be permitted if the account has been kept active for at least 3 years and at least 12 monthly deposits have to be made to the account before. Withdrawal of amount can be made in multiples of Rs. 5. Also, the amount withdrawn prematurely has to be repaid by individuals with interest by either lump sum or by EMIs.


Account holder(s) can enjoy rebates if an advance deposit of minimum 6 months is made.

Tax Benefits

This scheme is eligible for tax exemptions under Section 80C of Income Tax Act, 1961. Customers can claim up to Rs 1.5 Lakhs as per year tax exemption under Section 80C of Income Tax Act, 1961.