Post Office RD (Recurring Deposit) Interest Rate
This scheme last updated its deposit rates on 01-Jul-26.
Scheme Overview
The 5-year RD is the disciplined saver's scheme — a small fixed amount deposited every month that quietly compounds into a meaningful corpus. It is ideal for salaried earners who want to build savings out of monthly cash flow rather than a lump sum.
- Interest rate: 6.70% p.a., compounded quarterly (unchanged for the current quarter).
- Minimum / Maximum deposit: ₹100 per month minimum, in multiples of ₹10; no upper limit.
- Tenure: 5 years (60 monthly instalments). The account can be extended for a further 5 years.
- Loan facility: Up to 50% of the balance is available as a loan after 12 regular deposits.
- Premature closure: Allowed after 3 years, but only the lower Post Office Savings Account rate is paid on early closure.
- Eligibility: Resident individuals (single or joint), guardian for a minor, minor aged 10+ independently.
- Tax benefit: No Section 80C benefit. Interest is fully taxable.
- Payout: Principal plus interest at maturity. Missed instalments attract a small default fee and must be regularised.
Government Schemes — At a Glance
| Scheme | Rate (p.a.) | Tenure | Max Deposit | Eligibility | Early Closure | Tax Benefit | Payout |
|---|---|---|---|---|---|---|---|
| 7.10% | 15 yrs | ₹1.5L / year | Residents | Conditional | Yes | At maturity | |
| 8.20% | 21 yrs | ₹1.5L / year | Girl child | Conditional | Yes | At maturity | |
| 8.20% | 5 + 3 yrs | ₹30 lakh | Age 60+ | Yes | Yes | Quarterly | |
| 7.70% | 5 yrs | No limit | Residents | No | Yes | At maturity | |
| 7.50% | 1–5 yrs | No limit | Residents | Yes | Yes | Annual | |
| 6.70% | 5 yrs | No limit | Residents | Yes | No | At maturity | |
| 7.40% | 5 yrs | ₹9L / ₹15L joint | Residents | Yes | No | Monthly | |
| 7.50% | 115 months | No limit | Resident | Yes | No | At maturity |
Interest rates are for the July–Sept 2026 quarter and are revised quarterly by the Ministry of Finance. This is for educational purposes and is not investment or tax advice — verify current figures on India Post or NSI before investing.
Frequently Asked Questions
The 5-year Post Office Recurring Deposit earns 6.7% per annum for the July–September 2026 quarter, compounded quarterly. The rate is fixed for the full 5-year term once you open the account, though the government reviews it every quarter for new accounts.
You can start with just ₹100 per month, in multiples of ₹10, with no upper limit. The same amount must be deposited every month for the 5-year term. This makes the RD ideal for building savings steadily out of monthly income.
The Post Office RD runs for 5 years (60 monthly instalments) and can be extended for another 5 years. Missing an instalment attracts a small default fee, and the account can lapse if too many are missed, so regular deposits matter.
Premature closure is allowed after 3 years, but only the lower Post Office Savings Account rate is paid instead of the RD rate, reducing your return. A loan of up to 50% of the balance is available after 12 regular deposits as an alternative to closing.
Yes. The Post Office RD offers no Section 80C deduction, and the interest earned is fully taxable at your income-tax slab. You should declare the interest in your income-tax return each year. It suits disciplined monthly saving rather than tax planning.
The full amount — your monthly deposits plus compounded interest — is paid as a lump sum at maturity after 5 years; there is no periodic payout. For example, ₹5,000 saved every month grows to roughly ₹3.56 lakh over 5 years at 6.7%.