Post Office like Banks offer Recurring Deposit. The only difference is in banks you can choose tenure depending on our needs but Post Office RD is available for fixed tenure of 5 years. The good thing is the interest offered is generally higher than most government banks. We have designed a simple excel based Post Office RD calculator where you can input the monthly installment & interest rate and it will calculate the interest earned and maturity value.
Post Office RD Calculator
Calculating Post Office RD interest payout or maturity value is bit complicated. Using this calculator, if you invest Rs 1,000 per month at 7.3% interest for 5 years term, the maturity amount would be Rs 72,505.
Post Office RD Investment Rules:
The tenure for Post Office RD is 5 years which can be extended by another 5 years.
As with all other Small Saving Schemes like PPF, SCSS, Post Office FD rates are also declared every quarter. The Post Office RD Interest Rate for 2019 (Jan to Jun) is 7.3% (Check latest Post Office RD Interest Rate)
The minimum investment amount is Rs 10/month and there is no maximum investment limit (installment should be in multiples of 5).
There is no limit to the number of RD accounts you can create in post office. Essentially each RD created is like different account.
Premature withdrawal is allowed up to 50% of the balance after completion of 1 year.
Tax on Post Office RD Scheme:
The interest earned is subject to TDS @ 10% if the annual interest paid is more than Rs 40,000 [Budget 2019]
You can fill Form 15G/H in case you are eligible to avoid TDS
The interest received is fully taxable at applicable marginal income tax rates.
Effective April 1, 2018 Interest income up to Rs 50,000 is exempted from tax for Senior citizens u/s 80TTB [Budget 2018]
Calculating maturity amount on Post Office RD is a bit complex but you can download simple excel based Post Office RD calculator to calculate the annual interest and maturity amount.