The post office in India offers a variety of saving options to the citizens. These savings options are available with every local branch of the post office.
A recurring deposit account is opened for a periodic deposit (monthly) of a certain amount for a specific time duration for the purpose of saving. Post office recurring deposit account can be opened by
- a single person above the age of 18
- Joint Account to a maximum of 3 adults
- Any minor above the age group of 10 years
- A guardian on behalf of a minor or on behalf of Person of unsound mind
Documents Required to Open Post Office Recurring Deposit Account
- Application Form or account opening form.
- Identification proof self-attested.
- Address proof self-attested.
- A cash deposit of a minimum of Rs. 100/- or a cheque.
- Passport size photograph.
- In the case of illiterate depositors, the documents need to be attested by Gazetted Officer, Branch / Head / Sub / Chief postmaster, sarpanch, gram dak Sewa, etc. In case the account is opened through an agent, all documents are required to be attested by the agent as
The current interest rate offered in Post Office Recurring Deposit Account is 7.2% per annum which is quarterly compounded. This interest rate is effective from 01st July 2019. Upon maturity and completion of 5 years, the account holder will get Rs. 7231.38/- for a deposit of Rs. 100/- per month.
Features of Post Office Recurring Deposit Account
- An account is opened by payment of cash or cheque. The date of the clearance of the cheque shall be considered the date of deposit or opening of an account.
- An account can be opened with a minimum monthly deposit amount of INR 100/- per month or any amount in multiples of INR 10/-. There is no maximum limit defined for such a deposit.
- Date of maturity of Post Office Recurring Deposit is 5 years from the date of opening of the account. However, the account holder can submit an application form and extend the period for a further 5 years.
- The account can be closed prematurely after completion of three years only. The interest shall be payable for such period at the time of closure along with the principal amount.
- For the purpose of monthly deposit, if the account is opened before the 15th of a calendar month, a subsequent deposit should be made before the 15th of next month. If the account is opened between the 16th and the last day of the month, the amount can be deposited up to the last working day of next month.
- In case of default in payment and the payment is not made before the due date, a default fee @ Rs. 1 for every 100 rupees is charged. Further, the account becomes deactivated after 4 regular defaults and can be revived only after two months for such deactivation. In case the account is not revived within 2 months, no further deposits can be made.
- In case of defaults in payments of monthly deposit, the account holder needs to pay all the previous defaulted monthly amounts first with the default fee and subsequent payment or current month deposit.
- An account holder also gets a rebate on advance deposit of Rs. 10 for 6 months for the denomination of Rs. 100/- and Rs. 40 for 12 months for a denomination of Rs. 100/-. In order to avail of this rebate, a minimum of 6 advance installments is necessary.
- The account holder can avail of a loan up to 50% of the balance after one year of regular operating of the Post Office Recurring Deposit Account. The loan can be repaid along with the prescribed current or prevailing interest rate in one lump sum.
Important Points to Note
- The account holder can nominate a legal heir at the time of opening the account or at any time before maturity.
- There is no limit prescribed for the number of post office recurring deposit accounts allowed per individual and the depositor may open any number of accounts in any post office.
- A post office recurring deposit account can be transferred to another branch easily.
- After attaining maturity, the minor needs to apply to transfer the account in his or her name.
- The user can deposit money through online Net Banking or Mobile Banking and through IPPB Saving Account.
Closure of Account
- The account is closed after completion of 5 years, however the same can be extended for another 5 years.
- Premature closure is allowed only after completion of 3 years of the Post Office Recurring Deposit Account.
- The account shall be permanently closed in case of death of the account holder and the amount thus deposited can be claimed after completion of prescribed documentation as prescribed in the previous blog