What is Post Office Recurring Deposit (RD) Account?
The Post Office Recurring Deposit (RD) Account is a savings and investment option offered by the government of India through the India Post Office. It is a long-term investment option that allows individuals to earn a fixed rate of interest on their savings. The RD account is a flexible investment option, as the individual can choose the monthly deposit amount and the tenure of the account.
Eligibility for RD Account
Any resident Indian individual can open an RD account, including minors who can open the account through a guardian. Non-resident Indians (NRIs) are not eligible to open an RD account.
How to Open an RD Account
The RD account can be opened at any designated post office in India. To open an RD account, the individual must fill out an application form and provide proof of identity and address. The minimum investment amount for the RD account is INR 10 (Indian Rupees) per month, and there is no maximum investment limit.
Tenure of RD Account
The RD account has a minimum tenure of 5 years and a maximum tenure of 10 years. The individual can choose the tenure of the RD account at the time of opening the account.
Interest Rate on RD Account
The interest rate on the RD account is determined by the government and is reviewed periodically. The current interest rate on the RD account is 6.7% per annum, compounded quarterly.
Tax Benefits of RD Account
The RD account is not a tax-saving investment option, as the contributions made to the account are not eligible for tax deductions under section 80C of the Income Tax Act. The interest earned on the RD account is taxable.
RD Account as a Savings and Investment Option
The RD account is a safe and secure investment option with moderate returns, and is a popular choice among individuals looking to save and invest for the long term. It is a flexible investment option, as the individual can choose the monthly deposit amount and the tenure of the account. The RD account is an investment option worth considering for anyone looking to set aside a portion of their income for the future.
Conclusion
The Post Office Recurring Deposit (RD) Account is a savings and investment option offered by the government of India through the India Post Office. It is a long-term investment option that allows individuals to earn a fixed rate of interest on their savings.