Do you know what is the interest rate for post office RD?
If you are planning to book a recurring deposit at the Indian Post Office, you will get a 6.70% annual interest. India Post applies this rate to both regular and senior citizens. The interest is compounded quarterly, helping your savings grow faster.
Let me clarify how you will earn interest at a quarterly compounded rate with an easy example. Suppose you book a Recurring Deposit at the Post Office today. You choose a ₹1000 monthly investment at a 6.70% interest rate for 5 years.
After 5 years, your investment of ₹60,000 (₹1000*60 months) will grow to ₹71,366. This way, you will earn an extra ₹11,366 as interest due to a quarterly compound at the post office.
I am highlighting some of its crucial aspects:
- You have to book a Recurring Deposit at the Post Office for at least 5 years. The post office does not offer a tenure below that.
- The RD facility at the Indian post office lets you start an investment from only ₹100 with no upper limit.
- You must pay a penalty of ₹1 for every ₹100 if you miss the deposit due date at the post office. This increases your overall investment cost.
- To keep your RD account active and continue earning interest, you must avoid missing payments for 4 consecutive months.