Post Office Recurring Deposit (RD) 2026: Interest Rate, Rules & How Maturity Is Calculated

The Post Office Recurring Deposit (RD) pays 6.7% a year, compounded quarterly, on monthly deposits of ₹100 or more for five years. Saving ₹5,000 a month for 60 months gives about ₹3,56,829 at maturity, of which ₹56,829 is interest. The deposit gets no tax deduction.

Rate and key terms, October–December 2026

The Finance Ministry's memorandum of 30 September 2026 kept small-savings rates for October–December unchanged from July–September (SB Order 12/2026). India Post's savings page, updated 19 October 2026, lists the National Savings Recurring Deposit at 6.7% a year, compounded quarterly. The terms below come from the National Savings Recurring Deposit Scheme, 2019 and India Post's scheme booklet (October 2024 edition).

How much you get at maturity

Each instalment earns 6.7% compounded quarterly from the month it is paid. The maturity value is the sum, over all 60 instalments, of D × (1 + 0.067 ÷ 4)^(4 × m ÷ 12), where D is the monthly deposit and m is the number of months that instalment stays invested (60 for the first, 1 for the last). For ₹1,500 a month this gives ₹1,07,049, the same figure India Post's booklet shows. Actual post office statements can differ by a few rupees from rounding.

Interest compounds inside the account and is paid with your principal at maturity. There is no yearly payout. You can check your own amount with our RD calculator, but the post office's figure is the one that counts.

Missed instalments

The scheme sets the rules for defaults in paragraph 6:

• Up to four defaults: you can extend the maturity date by as many months as you missed and pay the missed instalments in that extra period.
• Revival fee: ₹1 for every ₹100 of the missed instalment, for each month of default. Missing one ₹2,000 instalment means paying ₹20 extra with it.
• More than four defaults: the account is discontinued. You can revive it only within two months from the month of the fourth default, by paying the missed instalments and the fee in one lump sum.
• If you do not revive it: the account stays on the books until its original maturity date and is paid out on the instalments actually deposited.

Paying six or more instalments in advance earns a small rebate under paragraph 7. An account with advance deposits cannot be closed early until the advance period is over.

Closing early, loans and extension

• Premature closure: allowed only after three years, on Form-2. The post office pays the savings-account rate (4%, per India Post) instead of the RD rate.
• Loan: India Post's booklet says you can borrow up to 50% of the balance once 12 instalments are paid and the account is not discontinued. The interest rate and repayment terms are set by India Post, so ask at the counter.
• After maturity: you can continue the account for up to five more years with monthly deposits (Form-4) or leave the maturity amount in the account for up to five years without new deposits. The booklet says an extended account keeps the rate at which it was opened.
• Death of the holder: the account closes and is paid to the nominee or legal heir, who may instead continue it in their own name.

Our RD premature withdrawal guide compares these rules with bank RDs.

Tax: RD is not a tax-saver

Section 123 of the Income-tax Act, 2025 (earlier Section 80C) allows up to ₹1,50,000 for the items in Schedule XV. That schedule lists a five-year Post Office Time Deposit but no recurring deposit, so RD instalments do not qualify. The interest is taxable at your slab rate. The Act's TDS rule for post office deposits (Section 393(1), formerly 194A) covers only deposits under notified schemes, and the Act does not list them, so report the interest in your return even if no TDS is cut. For a tax-saving post office option, see the Post Office Time Deposit guide.

Choosing between a post office RD and a bank RD

The post office RD is backed by the government, starts at ₹100, and has a rate that the Finance Ministry sets every quarter. A bank deposit is insured only up to ₹5 lakh per depositor per bank, principal and interest together. Bank RD terms, rates and early-exit rules vary by bank, so compare your bank's current offer. The post office RD's main drawback is the rigid three-year lock before any early exit. If you want market-linked growth for the same goal, see RD vs SIP and the wider small-savings ranking.

Pick an instalment you can pay every month. A smaller steady RD beats a larger one that ends up discontinued. This is general information from official rules as of October 2026.