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Post Office RD Account: What are the rules for premature closure and extension in 5 year RD of Post Office?

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Recently the interest on Post Office RD has been increased. It has been increased from 6.5% to 6.7%. These new rates have also come into effect from October 1. In such a situation, if you are also thinking of investing in Post Office RD, then know these things also.


Like FD, Recurring Deposit i.e. RD is also an option for people, on which they have trusted for years. Investment in RD has to be made monthly. On maturity you get the amount along with interest. In banks, you will get the option of RD for different time periods, but if you want to start RD in post office, then you will have to get RD done for 5 years.

Recently the interest on Post Office RD has been increased. It has been increased from 6.5% to 6.7%. These new rates have also come into effect from October 1. In such a situation, people’s attention has been drawn towards Post Office RD. But if you start RD in the post office and you need money before 5 years, then what are the rules and if you want to continue RD even after 5 years, then what are the rules for its extension? It is very important to know both these things. Know about it here.

On closing before maturity

According to the rules, Post Office RD account matures after 5 years, but if needed, you can close it after three years from the date of opening the account. But if you close this account even a day before the maturity period, then you will not be given interest as per the current interest rate of RD i.e. 6.7%, but you will be given interest equal to Post Office Savings Account. At present 4% interest is being given on post office savings account. In such a situation, you will get 4 percent return on premature closure.

Account extension conditions

If you want to continue your RD account even after five years, you will have to submit an application to the post office. But the same interest rate will be given on your extended RD account which was given at the time of opening it. The extended account can be closed at any time. But on closure, for full years, RD interest rate will be applicable and for tenure less than one year, Post Office Savings Account interest rate will be applicable. Therefore, try to close the extended account only after completion of one, two, three etc. years after maturity.

Who can open RD account

Any person who is 18 years of age can open an RD account for himself in the post office. Whereas the guardian can open this account in the name of the child. If the child is above 10 years of age and can make an identical signature, then he can himself open a post office RD account in his name. Apart from this, two to three people together can also open a joint RD account for themselves.

Pravesh Maurya
Pravesh Maurya
Pravesh Maurya, has 5 years of experience in writing Finance Content, Entertainment news, Cricket and more. He has done BA in English. He loves to Play Sports and read books in free time. In case of any complain or feedback, please contact me @ businessleaguein@gmail.com
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