Post Office Saving Schemes: Fixed Deposit Account Compared With Recurring Deposit Account

India Post has a network of more than 1.55 lakh post offices across the country and offers a variety of banking and remittance services, other than mailing services. Besides, the Department of Posts (India Post) also offers a number of saving schemes ranging from recurring deposit (RD) account to fixed deposit (FD) account, as mentioned on its official website- indiapost.gov.in. Interest rates on post office saving schemes move in line with the government's interest rates on small savings schemes. The interest rates on post office fixed deposits and recurring deposits range from 6.9 per cent to 7.8 per cent. 

Post office recurring deposit (RD) account

Post Office Recurring Deposit (RD) account can be opened by cash as well as cheque. In case of cheque, the date of deposit shall be the date of presentation of cheque, said India Post. Minimum amount for opening of post office recurring deposit account (RD) is Rs. 10 per month or any amount in multiples of Rs. 5. Post office RD account offers an interest rate of 7.3 per cent per annum. The interest rate on post office RD account is compounded annually. On maturity, a recurring deposit of Rs. 10 per month fetches a return of Rs. 725.05 on maturity, as mentioned on India Post's official website- indiapost.gov.in. The post office RD account can be continued for another five years on a year-to-year basis.

Post Office Time Deposit (TD) or Fixed Deposit (FD) account

Post office time deposit (TD) or Fixed Deposit (FD) account can be opened by cash or cheque. In case of cheque, the date of realization of cheque in government account should be date of opening of account, said India Post. Interest is payable annually but is calculated quarterly. This account offers interest rates across four maturities: one year, two years, three years, and five years. Post office fixed deposit for one year, two years, three years, and five years offer 6.9 per cent, 7 per cent, 7.2 per cent, and 7.8 per cent respectively. The minimum amount that one requires to open a fixed deposit with the post office is Rs. 200.