Post Office Recurring Deposit (RD) 2026
Build a corpus with a fixed monthly deposit starting at ₹100.
Rates for July–September 2026 (Q2 FY 2026-27) · Updated 30 September 2026What is Post Office Recurring Deposit (RD)?
The National Savings Recurring Deposit Account lets you deposit a fixed amount every month for five years at a government-set rate, compounded quarterly. It suits disciplined savers building towards a known 5-year goal.
PO RD at a glance
| Particular | Details |
|---|---|
| Current interest rate | 6.7% p.a. (Jul–Sep 2026) compounded quarterly |
| Deposit | Min ₹100/month, multiples of ₹10 |
| Tenure | 60 months |
| Loan | Up to 50% after 12 instalments |
| Premature closure | After 3 years |
| Extension | One further 5-year period |
Government-notified terms for July–September 2026 (Q2 FY 2026-27). Verify the latest notification before investing.
Features & benefits of PO RD
₹100/month.
Rebate on 6 or more months paid in advance.
50% of balance after 12 instalments.
5 more years at the rate prevailing when opened.
Eligibility — who can invest?
- Resident adults (single/joint up to 3)
- Guardian for minors; minor above 10 in own name
How does PO RD work?
- Deposit by the 15th (accounts opened 1st–15th) or end of month (opened 16th onward).
- Interest compounds quarterly; paid at maturity.
- Default fee ₹1 per ₹100 per month; after 4 defaults account discontinues (revive within 2 months).
Tax benefits of PO RD
| Stage | Tax treatment |
|---|---|
| Deposit | No Section 80C / 123 deduction |
| Interest | Taxable |
| TDS | Not deducted |
Section 80C of the Income-tax Act, 1961 is Section 123 of the Income-tax Act, 2025 from tax year 2026-27. Deductions apply only in the old tax regime.
Withdrawal, premature closure & maturity rules
| Situation | Rule |
|---|---|
| Premature closure | After 3 years; interest at POSA rate |
| Loan | 50% of balance after 12 instalments at RD rate + 2% |
At maturity
| Option | What happens |
|---|---|
| At 5 years | Maturity paid |
| Extension | Continue 5 more years with/without deposits |
Loan against PO RD
| Parameter | Rule |
|---|---|
| Eligibility | After 12 instalments, account active |
| Amount | Up to 50% of balance |
| Interest | RD rate + 2% |
PO RD returns — worked examples
| Monthly deposit | Total deposit (60 months) | Maturity @6.7% | Interest |
|---|---|---|---|
| ₹1,000 | ₹60,000 | ₹71,366 | ₹11,366 |
| ₹5,000 | ₹3,00,000 | ₹3,56,829 | ₹56,829 |
| ₹10,000 | ₹6,00,000 | ₹7,13,658 | ₹1,13,658 |
Quarterly compounding, assumes on-time deposits.
PO RD calculator
How to open / invest in PO RD
- Open at post office or through IPPB/India Post net banking.
- Choose monthly amount.
- Set auto-debit from POSA.
Documents required
- Aadhaar
- PAN
- Photographs
Important forms
| Form | Purpose |
|---|---|
| Account opening form | Open RD |
| Loan form | Loan against RD |
| Closure form | Maturity/premature |
Advantages & limitations
- Disciplined saving
- Low minimum
- Loan facility
- Taxable interest
- Lower rate than NSC/PPF
- Default fees
Mistakes to avoid
- Missing deposits and paying default fees
- Closing before 3 years
PO RD vs other saving schemes
| Scheme | Rate | Tenure | Minimum | Tax |
|---|---|---|---|---|
| PO RD | 6.7% p.a. | 5 years (extendable by 5 years) | ₹100 per month | Interest taxable |
| POSA | 4.0% p.a. | No fixed tenure | ₹500 opening & minimum balance | Interest exempt up to ₹3,500 (₹7,000 joint) |
| PO TD | 6.9% – 7.5% p.a. | 1, 2, 3 or 5 years | ₹1,000 | 5-year TD qualifies for deduction; interest taxable |
| POMIS | 7.4% p.a. | 5 years | ₹1,000 | Taxable — no deduction |
| NSC | 7.7% p.a. | 5 years | ₹1,000 | EET (reinvested interest deductible) |
Frequently asked questions
Is PO RD better than bank RD?
PO RD has sovereign backing; some bank RDs pay more for specific tenures — compare.
Can I pay RD online?
Yes, via India Post net banking / IPPB app.
Information is for education and comparison. Interest rates are notified by the Government every quarter and scheme rules can change — confirm with India Post, your bank, EPFO or PFRDA before investing. FinancePortal is not a financial or tax adviser.