5-Year RD in Post Office: Interest Rate, Benefits and Maturity Amount

The Post Office 5-year RD offers an interest rate of 6.7% per annum, compounded quarterly, for the period from 1 October to 31 December 2026. The Government of India notifies small-savings interest rates, which may be reviewed periodically.

The rate shown is the rate applicable for the stated quarter. Before opening an account, confirm the current rate and the rules that apply to the account with India Post.

The maturity amount depends on how much you deposit each month, the interest rate and the scheme's calculation rules. The following example illustrates how regular deposits can accumulate over five years.

Example: Rs. 5,000 per month for five years

Suppose you deposit Rs. 5,000 every month for 60 months at an illustrative annual interest rate of 6.7%, compounded quarterly.

This is an estimate based on the stated rate and the scheme's standard maturity calculation. The actual amount should be confirmed using the applicable India Post RD calculation or at the post office before opening the account.

The example shows how consistent monthly contributions can help build a corpus over time. The result is not the same as investing Rs. 3 lakh at the start of the period, because RD instalments are deposited at different times and therefore earn interest for different durations.

A Post Office RD combines regular contributions with interest earnings. Its main features include the following:

1. Small monthly contributions

You can open an RD with a minimum monthly instalment of Rs. 100. Higher instalments can be made in multiples of Rs. 10, and the scheme has no specified maximum deposit limit.

This allows you to choose a monthly amount that fits your budget. Before selecting the instalment, account for regular expenses and keep enough money available for emergencies.

2. Quarterly compounding

Interest is compounded quarterly under the scheme. This means interest is calculated and added according to the scheme's prescribed quarterly compounding method.

The total interest earned depends on the amount and timing of each monthly instalment, the applicable rate and the tenure. You can use the scheme's maturity calculation to estimate the proceeds before opening an account.

3. Government-backed small-savings scheme

The Post Office RD is part of the Government of India's small-savings programme. Its rules and interest rates are notified under the applicable scheme framework.

It is not market-linked, so its returns are not directly tied to daily stock-market movements. However, you should still understand the account's terms, the applicable rate and the restrictions on withdrawals.

4. Advance deposit facility

The scheme permits advance deposits for eligible periods, and rebates may be available under the applicable rules. For example, the scheme provides specified rebates for advance deposits of six or twelve monthly instalments.

Check the current rebate conditions with the post office before making an advance payment. Paying in advance can help you manage instalments, but you should ensure that it does not leave you short of money for other needs.

5. Account transfer facility

A Post Office RD account can be transferred from one post office to another under the applicable procedure. This can be useful if you move to a different area during the five-year tenure.

6. Loan facility against the RD balance

After at least 12 instalments have been deposited and the account has been active for one year, a loan of up to 50% of the eligible balance may be available, subject to the scheme's conditions.

A loan is not the same as a withdrawal. It creates a repayment obligation, so review the applicable terms before using this facility.

7. Joint and minor accounts

An RD can be opened by an eligible adult in their own name or jointly by up to three adults. A guardian can open an account on behalf of an eligible minor, and a minor aged 10 or above may be permitted to open and operate an account in their own name under the scheme rules.

Confirm the applicable account type and documentation requirements with India Post.

Regular monthly deposits are an important condition of a Post Office RD. If you miss an instalment, a default fee applies.

For an account with a Rs. 100 monthly instalment, the default fee is Rs. 1 for each month of default. A proportionate fee applies to higher instalment amounts.

Repeated missed instalments can affect the account's status. Under the scheme rules, after four regular defaults, the account may be discontinued. It may be possible to revive it within the permitted period by paying overdue instalments and applicable fees.

If you have missed a payment, contact the post office handling your account to confirm the amount due and the steps required to keep the account active. Do not assume that a missed instalment will automatically be carried forward without consequences.

Premature closure is generally permitted after the account has completed three years, subject to the applicable rules and prescribed procedure.

If an account is closed before maturity, the Post Office Savings Account interest rate may apply instead of the RD rate. This can reduce the interest earned compared with keeping the account open for the full tenure.

Before closing the account, compare the amount payable on premature closure with the expected maturity proceeds. If you need money temporarily, check whether a permitted loan against the RD balance is available and whether its repayment cost is appropriate for your situation.

The scheme permits the following account holders, subject to its rules:

• An adult opening an account in their own name.
• Up to three adults opening a joint account.
• A parent or guardian opening an account on behalf of an eligible minor.
• A minor aged 10 or above operating an account in their own name.
• A guardian opening an account for a person who cannot manage their own affairs, where permitted under the rules.

Non-resident Indians (NRIs) are generally not eligible to open a new Post Office RD under this scheme. Check the current eligibility conditions with India Post if your residential status or account ownership is unusual.

The documents required may depend on the applicant and account type. Common requirements include:

• A completed account-opening application form.
• Proof of identity and address accepted under the applicable KYC rules.
• Recent photographs, if required by the post office.
• PAN and other tax-related details, where applicable.
• Guardian or minor-related documents, if opening an account on behalf of a minor.
• Nominee details, where applicable.

The exact document list can change according to the applicable KYC and account-opening rules. Confirm the requirements with your post office before visiting.

You can open an RD through a post office. Online account services may also be available through India Post's banking facilities, depending on your existing account and eligibility.

Opening an account at a post office

1. Visit a post office that offers savings schemes.
2. Request the National Savings Recurring Deposit Account application form.
3. Complete the form with your personal and account details.
4. Submit the required KYC documents and nominee details, where applicable.
5. Select your monthly instalment amount.
6. Make the initial deposit using an accepted payment method.
7. Retain the account details and deposit acknowledgement for your records.

Managing deposits online

India Post offers online banking facilities for eligible Post Office Savings Bank customers, including services related to RD accounts. Availability depends on the account and the facilities enabled for the customer.

Visit the official India Post banking services page to check the current options. Follow the official account-opening and login instructions rather than sharing your credentials with third parties.

A Post Office RD and a Bajaj Finance FD serve different saving needs. An RD is designed for people who want to deposit money regularly, while an FD is generally funded with a lump sum at the time of booking.

If you can set aside a fixed amount from your salary each month, a Post Office RD may help you build savings gradually. If you already have a lump sum and want to invest it for a defined period, a Bajaj Finance FD may be worth comparing.

Bajaj Finance FD rates effective from w.e.f 07 October, 2026 are up to 7.75% p.a. for customers below 60 years and up to 8.15% p.a. for senior citizens on eligible tenures and payout options. The applicable rate depends on the deposit terms selected.

These maximum rates should not be compared directly with the Post Office RD rate without considering the different investment methods and interest calculations.

Bajaj Finance FDs carry CRISIL AAA/STABLE and [ICRA]AAA(Stable) ratings. These ratings reflect the agencies' assessment of creditworthiness but are not guarantees of repayment. Company FDs are not covered by DICGC deposit insurance.

If you are comparing the two options, consider whether you want to save monthly or invest an existing lump sum, how long you can leave the money invested, the applicable return and the conditions for early access.

A 5-year Post Office RD can help you build savings through regular monthly instalments. It offers a minimum monthly deposit of Rs. 100, quarterly compounding and a five-year tenure. For October–December 2026, the interest rate is 6.7% p.a., subject to the applicable scheme rules.

Before opening an account, estimate the maturity amount, choose a monthly instalment you can maintain and understand the rules for missed payments and premature closure. If you already have a lump sum to invest rather than a monthly amount to save, compare the Post Office RD with a fixed deposit, such as a Bajaj Finance FD, based on the investment method, tenure, interest payout and liquidity requirements.