Looking To Invest In Post Office Recurring Deposit? 10 Things To Know

India Post, the postal network of the country, offers a variety of banking and remittance services. Besides, India Post also offers a number of small saving schemes for investors. One such savings scheme offered by India Post is the five-year recurring deposit (RD) account. India Post, under the Department of Posts, offers interest at the rate of 7.3 per cent per annum on investment in the five-year recurring deposit (RD) account, according to its official website - indiapost.gov.in.  The interest rate on post office RD account is compounded quarterly, according to India Post - which has a network of has a network of more than 1.55 lakh post offices across the country.

Here are 10 things to know about Post Office five-year recurring deposit (RD) account:

1. A post office recurring deposit (RD) account can be opened by cash as well as cheque. In case of cheque, the date of deposit is the date of presentation of cheque, according to India Post.

A recurring deposit is a type of term-deposit. Unlike a fixed deposit account, in which a lump-sum amount is locked in for a defined period against a fixed return, a recurring deposit account allows the investor to park a fixed amount of funds at regular intervals; for instance, every month. (Also read: How post office fixed deposit (FD) account works)

2. The minimum amount required for opening a post office recurring deposit account (RD) is Rs 10 per month. While there is no upper limit applicable to the deposit in an RD account, the investor can pick any value in multiples of Rs 5 above Rs 10, according to the India Post portal.

3. On maturity, a recurring deposit of Rs 10 per month fetches a return of Rs 725.05. The post office five-year RD account can be continued for another five years on a year-to-year basis, according to India Post.

4. A nomination facility is available at the time of opening and also after opening of account.

5. A post office RD account can be transferred from one post office to another.

6. Any number of RD accounts can be opened in a post office.

7. A post office recurring deposit (RD) account can be opened in the name of minor. A minor of age 10 years and above can open and operate the account. After attaining maturity, the minor is required to apply for conversion of the account to his or her name, according to the post office website.

8. A joint account can also be opened by two adults. A single account can be converted into a joint account, and vice-versa.

9. One withdrawal up to 50 per cent of the balance is allowed after one year in case of a post office recurring deposit account. However, it should be repaid in one lump-sum along with interest at the prescribed rate at any time during the currency of the account, according to India Post.

10. In case of death of depositor, the full maturity value allowed on a post office RD account is restricted to Rs 50 denomination, subject to fulfillment of certain conditions, according to India Post.