Post Office recurring deposit (RD): Penalty waiver, interest rate, other details
Online deposit facility into Post Office RDs is however available through India Post Payments Bank savings accountIn case of a default in monthly deposit, a fee is charged. But the government has waived it due to lockdown
Due to the lockdown, the government has temporarily waived penalty/revival fee on 5-year Post Office RDs (recurring deposits) if monthly deposits are not made. Deposits can be made till June 30 without attracting penalty or revival fee. Online deposit facility into Post Office RDs is however available through India Post Payments Bank savings account.
"The subscribers of RD A/c/ SSA/ PPF A/c may deposit the mandated due amount, if any of Current FY (2019-20) and April, 2020 (as the case may be) in their respective accounts till 30th June, 2020 and no penalty/ revival fee shall be charged," the Department of Posts said.
In 5-year Post Office RD, an investor puts in a fixed amount each month for a period of 60 months. The interest rate remains the same for the depositor once he opens the account.
In case of a 5-year Post Office RD, deposits can be made up to 15th day of next month if account is opened up to 15th of a calendar month and up to last working day of next month if account is opened between 16th day and last working day of a calendar month.
In case of a default, a fee at the rate of Re 1 for every 100 rupee is charged. The depositor has to first pay the defaulted monthly deposit with default fee and then pay the current month deposit. After four regular defaults, the account becomes discontinued.
For the April to June quarter, the government sharply cut the interest rate on 5-year Post Office RDs to 5.8% as compared to 7.2% in the previous quarter.
Here are other things to know about 5-year Post Office RDs:
5-year Post Office RDs can be extended for further 5 years
Premature closure is allowed after three years from the date of opening of the account
Loan facility is available facility. Loan up to 50% of the balance allowed after one year
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