Post Office RD Interest Rates 2026

In summary

The Post Office Recurring Deposit supports disciplined monthly saving through a government-backed account offering fixed returns over five years.

• Current quarterly rate remains 6.7% annually.
• Interest compounds quarterly across five years.
• Monthly deposits start from Rs. 100.
• Loans follow one year and twelve deposits.
• Premature closure starts after three years.

Understanding these rules helps investors estimate returns, avoid defaults, and select an investment matching their liquidity requirements.

Post office RD interest rates 2026

The government reviews small-savings rates quarterly, so rates applying after 30 September 2026 may change.

Features of Post Office RD scheme

A RD account comes with the following features:

• Monthly deposits begin at Rs. 100 and increase in Rs. 10 multiples.
• No notified upper deposit limit applies under the scheme.
• Nomination, joint holding, account transfer from RD to savings account, and advance instalments are available.
• A loan may become available after one year and twelve deposits.
• Premature closure is permitted after three years under applicable conditions.
• Account holders may extend the account for another five years.

Post Office Recurring Deposit interest is compounded quarterly, while investors deposit a fixed amount every month. The standard lump-sum compound interest formula is unsuitable because every monthly instalment earns interest for a different period. The following recurring deposit formula provides a more accurate estimate:

M = P × [(1 + i)^n − 1] ÷ [1 − (1 + i)^(-1/3)]

Where:

• M = Maturity amount
• P = Monthly deposit amount
• r = Annual interest rate expressed as a decimal
• i = Quarterly interest rate, calculated as r ÷ 4
• n = Total number of quarters during the tenure

The negative one-third term adjusts the calculation for monthly deposits within each quarterly compounding period.

Example

Suppose Mr. K deposits Rs. 6,000 monthly for five years at the current 6.7% p.a. interest rate.

The required values are:

• P = Rs. 6,000
• r = 0.067
• i = 0.067 ÷ 4 = 0.01675
• n = 5 × 4 = 20 quarters

Applying the formula:

M = 6,000 × [(1 + 0.01675)^20 − 1] ÷ [1 − (1 + 0.01675)^(-1/3)]

Estimated maturity amount = Rs. 4,28,195

Mr. K deposits Rs. 3,60,000 over 60 months and earns approximately Rs. 68,195 as interest. The final amount may vary slightly because India Post applies its prescribed maturity tables and rounding rules.

RD tenure

The standard account requires 60 monthly instalments and matures after five years. Account holders may extend it for five additional years under applicable rules.

Minimum and maximum deposit

The minimum monthly deposit is Rs. 100, followed by multiples of Rs. 10. There is no notified maximum monthly deposit under the scheme.

Deposit dates

Accounts opened before the sixteenth require subsequent deposits by the fifteenth of every month. Later openings require subsequent deposits before each month’s final working day.

Penalties for delayed deposits

Up to four defaults can be regularised according to the scheme’s conditions. The default fee is Rs. 1 for every Rs. 100 of each missed monthly deposit.

Post Office RD rebate

For a Rs. 100 instalment, six advance deposits provide a Rs. 10 rebate. Twelve advance deposits provide a Rs. 40 rebate for every Rs. 100 denomination.

Premature withdrawal of Post Office RD (Recurring Deposit)

Premature closure becomes available after three years from the account-opening date. The balance receives the Post Office Savings Account rate instead of the Post Office RD rate. Advance deposits must complete their covered period before premature closure becomes available.

Post Office RD loan facility

After one year and twelve deposits, account holders may borrow up to 50% of their eligible balance. The loan carries simple interest two percentage points above the applicable Post Office RD rate. Therefore, the current loan interest rate is 8.7% p.a. when the Post Office RD rate is 6.7%. Unpaid principal and interest are deducted from the account’s maturity proceeds.

For quick and easy access to funds you can also consider Bajaj Finance Loan against FD. This allows you to borrow against your existing Bajaj Finance FD while still earning interest on the entire amount.

How does taxation apply to a Post Office RD account?

The Income-tax Act, 2025 applies from 1 April 2026 and changes several familiar section numbers. Old Section 80C now corresponds to Section 123, but Post Office RD deposits remain ineligible for this deduction. Interest earned is taxable under income from other sources at the investor’s applicable slab rate. Section 393, replacing old Section 194A, contains the applicable tax deduction at source provisions.

Post office RD Interest rate eligibility

The Post Office Recurring Deposit scheme is available to the following applicants:

• A single adult can open an individual account.
• Up to three adults can open a joint account.
• A guardian can open an account for a minor.
• A guardian can also open for a person of unsound mind.
• A minor aged ten years or above can open an account independently.

The scheme has a fixed tenure of five years and requires monthly deposits.

Deposits start from Rs. 100 and must increase in multiples of Rs. 10. There is no separate Post Office RD interest rate for senior citizens. All eligible account holders receive the applicable notified rate when opening their accounts. Regular deposits can help investors build savings gradually for planned financial requirements.

Also read: Post Office Monthly Income Scheme

Documents required to open a Post Office RD account

Applicants generally need an account-opening form, Aadhaar, PAN or Form 60, address proof, photographs, and nomination details. India Post may request additional KYC documents based on the applicant’s identity and existing records.

Bajaj Finance Fixed deposit rates vs Post Office RD Interest Rates 2026

Post Office RD supports regular monthly saving, while Bajaj Finance Fixed Deposit suits lump-sum investing and flexible payout requirements. Bajaj Finance Fixed Deposit rates apply from 1 May 2026 and remain subject to revision.

Conclusion

The Post Office's Recurring Deposit scheme is an attractive investment option for individuals seeking a fixed interest rate and flexible deposit options. The Post Office RD interest rates 2026 provide predictable growth through government backing, quarterly compounding, and disciplined monthly deposits. Before investing, compare taxation, liquidity, deposit frequency, and tenure with your financial requirements. Monitor quarterly notifications because interest rates applying after 30 September 2026 remain subject to government review.

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