1 min read.Updated: 24 Sep 2021, 04:42 PM ISTLivemint
Post office recurring deposit account: In case loan is not repaid till the maturity, loan plus interest is deducted from the maturity value
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The Department of Post said that it is receiving many representations from RD or recurring deposit account holders about the need for credit of outstanding RD loan/interest amount on matured RD accounts in software platform. After examining the matter, the Department of Post has made necessary amendments.
Accordingly, post offices that are Core Banking Solution or CBS enabled will deduct outstanding RD Loan/interest amount from the matured RD account. The deducted amount shall be adjusted through office account at the time of RD maturity payment. In other words, the outstanding RD Loan/Interest of matured RD accounts shall not be collected from the account holders at the time of payment of maturity value.
In case loan is not repaid till the maturity, loan plus interest will is deducted from the maturity value of the RD account.
Post office RD accounts mature in 5 years or 60 monthly deposit) from the date of opening. Accounts can be extended for further 5 years by giving application at concerned Post Office. Interest rate applicable during extension will be the interest rate at which account was originally opened.
A post office RD account can be retained up to 5 years from the date of maturity without deposit also.
Loans can be taken against RD accounts after 12 installments are deposited and account is continued for 1 year. The depositor can avail loan facility up to 50% of the balance credit in the account. Loan can be repaid in one lump-sum or in equal monthly installments. Interest on loan will be applicable as 2% + RD interest rate applicable to the RD account.