Post office recurring deposit: rules, 6.7% rate and a Rs 5,000 a month example

2026-11-04

A recurring deposit, or RD, suits people who cannot put away a big sum at once but can save a fixed amount every month. The post office version, the National Savings Recurring Deposit Account, is run under a government scheme, so the rules are written in an official notification. This guide explains the main ones in plain English and then works out an example you can check yourself.

The rate right now

The India Post savings page, checked on 4 November 2026, shows the RD rate as 6.7% a year, compounded quarterly. Rates for small savings schemes are set by the government and reviewed every quarter, so the rate for a later quarter can differ. The rate you see today is not a promise for the five years of your account.

The main rules

These points come from the National Savings Recurring Deposit Scheme, 2019 notification.

Who can open: a single adult, up to three adults jointly, a guardian for a minor, or a minor who has reached the age of ten in their own name. A person may hold more than one account.
Term: the account matures after five years, with sixty monthly deposits.
Deposit size: the minimum is Rs 100 a month, or any amount in multiples of Rs 10. The first deposit sets the amount, and later deposits must equal it.
Due date: if the account is opened on or before the 15th of a month, deposits are due by the 15th of each month. If it is opened from the 16th to the last working day, they are due by the last working day of each month.
Missed deposits: up to four defaults are allowed, and the account can be extended by that many months to make them up. More than four defaults make the account discontinued, and it can be revived only within two months of the fourth default. A revival fee of Rs 1 for every Rs 100 of a missed instalment applies for each month of default.
Early closure: allowed after three years, but interest is then paid at the Post Office Savings Account rate, not the RD rate.
Loan: after one year and twelve monthly deposits, you can borrow up to 50% of the deposits made, at an interest rate two percentage points above the RD rate.
After maturity: the account can be continued for up to five more years with deposits, or the money can be left in without new deposits.

A worked example with round numbers

Suppose you open an RD with Rs 5,000 a month for the full five years, and assume the rate stays at 6.7% compounded quarterly for the whole term. Each deposit earns interest from the month it goes in until maturity.

You deposit Rs 5,000 x 60 = Rs 3,00,000 in total.
The maturity amount comes to about Rs 3,56,829.
The interest part is about Rs 56,829.

We checked this with two separate calculations, and both give Rs 3,56,829.14. It is an estimate. The rate can change each quarter, and a post office works with its own rounding rules, so your passbook may differ by a few rupees.

One more point about the official papers. The 2019 notification also prints a maturity amount of Rs 7,231.38 for a Rs 100 account. Our calculation gives exactly that figure when it uses a rate of 7.2%, so the printed table reflects the rate when the scheme was notified. It is not today's figure, which is why a calculator that uses the current rate is more useful.

Is an RD right for you?

An RD works as a discipline tool, because the deposit goes out every month. It is less flexible than a savings account, because skipping deposits has a cost and early closure before three years is not allowed. Think about whether you can keep paying for five years before you start. Compare the rate with other options such as a bank RD or the other schemes on the India Post page, and look at the tax treatment of interest, which depends on your own situation.

Try the Gunaka RD calculator with your own monthly amount and the current rate. It is an estimate, not financial advice.

Try the Gunaka calculator

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Sources

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