The Post Office Recurring Deposit (RD) is designed for people who want to save regularly but cannot invest a lump sum. You commit to depositing a fixed amount every month for 5 years, and at the end you receive the total deposits plus compound interest.
This is an excellent tool for building financial discipline — the monthly commitment makes you prioritise saving, and the government guarantee means there is no risk of loss.
Who Should Invest?
- Salaried individuals who want to save a fixed amount every month
- Parents saving for a child's school fees 5 years from now
- First-time savers building the habit of regular investing
- Anyone who wants a safe alternative to a recurring bank deposit
Key Features
- Start with just ₹100 per month. No maximum limit.
- Interest compounded quarterly
- 5-year tenure. Extension allowed in blocks of 5 years.
- One missed instalment allowed per year (small penalty applies)
- Loan against RD available after 1 year
Watch Out For
- No 80C tax benefit
- Premature closure before 3 years attracts lower interest rate
- Requires consistent monthly deposits — defaulting attracts penalty
Compare All NSS Schemes
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