What is a Post Office RD for 5 Years?
The Post Office RD for 5 years is a savings scheme that allows you to deposit your funds for 60 months and earn compound interest, calculated quarterly. Post Office offers stable returns without exposure to market fluctuations and can help build funds for goals such as your child’s education, marriage, or unexpected household expenses. The scheme is suitable for salaried individuals, conservative investors, and homemakers looking for a disciplined savings option.
Key Features of the Post Office RD ₹1000 Per Month 5 Years
The table below clarifies the essential features of the Post Office RD 1000 per month 5 years scheme:
| Features |
Description |
| Default Fee |
Up to 4 defaults can be regularised by paying missed installments and a ₹1 per ₹100 monthly revival fee. Beyond 4 defaults, the account is discontinued but can be revived within 2 months of the fourth default. |
| Advanced Deposit (Rebate) |
Advance deposits of 6 months or more qualify for a rebate. A ₹10 rebate applies for 6–11 advance installments, while ₹40 applies for 12–17 advance installments. The rebate increases for subsequent blocks of advance installments as per the applicable Post Office RD rules. |
| Loan Facility |
A loan of up to 50% of the balance in the RD account can be availed once the account has been active for at least 1 year with 12 monthly deposits. The loan carries simple interest at 2 percentage points above the RD interest rate and can be repaid in a lump sum or monthly installments. |
| Minimum Deposit |
Minimum ₹100 per month, in multiples of ₹10. There is no maximum limit. |
| Premature Closure |
If closed after 3 years, the balance earns interest at the prevailing Post Office Savings Account (POSA) rate (currently 4%) instead of the RD rate. |
| Nomination |
Nomination is mandatory and can be made in favour of up to 4 individuals. |
| Transferability |
Accounts can be transferred from one Core Banking Solution (CBS) Post Office to any other CBS Post Office across India. |
Deposit Amount and Maturity Calculation
If you deposit ₹1,000 per month in the Post Office Recurring Deposit scheme, your savings can grow into a sizable corpus. For instance, at the current 6.70% annual interest rate compounded quarterly, a total deposit of ₹60,000 over 5 years will give a maturity value of about ₹71,366 (rounded to the nearest rupee).
The maturity is calculated using the standard RD formula:
M = R × [(1 + i)^n – 1] ÷ [1 – (1 + i)^(-1/3)]
Here,
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R is the monthly deposit (₹1,000),
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i is the quarterly interest rate, which is the annual rate divided by 4 and then by 100 (for 6.70%, i = 0.01675), and
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n is the total number of quarters in the tenure (for 5 years, 60 months ÷ 3 = 20 quarters).
Substituting these values into the formula gives:
M = 1000 × [(1.01675^20 – 1) ÷ (1 – 1.01675^(–1/3))] ≈ ₹71,366
This means the deposit of ₹60,000 earns an interest of about ₹11,366, leading to the final maturity amount rounded to the nearest rupee.
To understand the effect of higher deposits, consider a few scenarios.
A monthly deposit of ₹2,000 for 5 years grows to about ₹1,42,732, while ₹3,000 per month for 5 years results in a maturity value of about ₹2,14,098.
These examples show how compounding boosts returns over time. The India Post RD Calculator or NSI-provided tables can be used for precise planning. They reflect official interest rates and give authoritative payout values, helping you see how deposit amount or tenure changes affect the maturity.
Who Can Open the Post Office RD ₹1000 Per Month 5 Years?
The Post Office Recurring Deposit scheme is available to eligible resident individuals, including adults, minors through guardians and eligible minors aged 10 years or above. Here are the basic eligibility requirements:
| Category |
Eligibility criteria |
| Single adult |
Any resident of India aged 18 or above can open this account in their own name. |
| Guardians for Minors |
A minor aged 10 years or above can open an account and independently operate the account. |
| Minors (10+ years) |
A minor aged 10 years or above can open an account and independently operate the account. |
| Multiple Accounts |
Investors may hold more than one RD account, independently or jointly. |
| Guardians for Special Needs |
A guardian can open and operate an account on behalf of persons declared of unsound mind under the law. |
| Joint Accounts |
Up to three adults can jointly hold a single RD account.
Joint Account Types:
- Joint A: Operated jointly by all or surviving depositors
- Joint B: Operated by any one or surviving depositor
|
Note:
-If a minor account holder’s age turns 18 years, they need to submit an account opening form along with the updated KYC documents so that their account gets converted into an adult account.
-According to Post Office Savings Bank (POSB) rules, eligibility is limited to resident individuals and guardians.
-Non-Resident Indians (NRIs) cannot open new RD accounts, but an existing account may continue if the depositor acquires NRI status after opening, subject to applicable conditions.
How to Open a Post Office RD ₹1000 Per Month for 5 Years
Below are the steps to open a Post Office RD ₹1000 per month 5 years:
Step 1: Visit a Nearby Post Office
Go to any Indian Post Office branch where savings and RD services are supported. Check the India Post website to locate your nearest branch.
Step 2: Fill out the Account Opening Form
Get the account opening form from the counter and fill it with the required details.
Step 3: Submit Necessary Documents
Provide the self-attested copies of the following documents:
| Document Type |
Accepted Proofs |
| Identity Proof |
- Aadhaar Card
- PAN Card
- Voter ID
- Passport
- Driving License
|
| Address Proof |
Any of the following:
- Aadhaar
- Utility bill
- Passport
- Bank statement
|
| Photographs |
Two passport-sized photographs (recent) |
| Initial Deposit |
₹1000 either as cash or cheque (for the initial instalment) |
Note: Keep original documents with you for in-person verification. Per the Government Savings Promotion Rules (GSPR), submission of PAN is mandatory if the balance in any account exceeds ₹50,000, aggregate deposits across all Post Office schemes exceed ₹10 lakh, or annual interest exceeds ₹10,000.
Step 4: Select the Account Type
Select any of these:
-
A Single Account
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A Joint Account (for up to 3 adults)
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Minor Account (10+ years or guardian-operated)
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Guardian-operated Account (for individuals declared of unsound mind under applicable law)
Step 5: Get the Passbook and Confirmation
After the verification, you will get an RD passbook from the Indian Post Office. It specifies details like the Post Office RD interest rate, account number, etc. You will also receive the confirmation receipt for the deposit made.
Step 6: Configuring Standing Instructions (Optional)
To automate monthly deposits, you can link your account and configure it through mobile banking or by setting up the standing instructions.
Tax Treatments for Post Office RD Scheme ₹1000 Per Month 5 Years
Interest earned on the Post Office RD scheme is taxable as per the applicable income-tax rules. Tax Deducted at Source (TDS) provisions for interest on Post Office deposits are governed by Section 393 of the Income-tax Act, 2025 (corresponding to Section 194A under the Income-tax Act, 1961). However, it remains fully taxable under the Income Tax Act and must be reported in the income tax return under ‘Income from Other Sources’.
Post Office RD deposits do not qualify for a deduction under Section 123 of the Income-tax Act, 2025 (earlier Section 80C). It is backed by the Government of India, making it a low-risk savings option that provides fixed returns.
Estimate Returns Using Post Office RD Calculator
The Post Office RD Calculator allows estimating the amount of maturity and the interest you receive on your recurring deposit. You can easily compute the potential returns by entering the details like the monthly instalment, investment period and interest rate charged. It can also assist in making comparisons of various amounts of monthly deposits and learn how frequent contributions might influence the final maturity value in the long run.
FAQs
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1. What is RD ₹2,000 per month for 5 years in the Post Office?
₹2,000 per month for 5 years means total deposits of ₹1,20,000. At the current Post Office RD interest rate of 6.70% p.a., the maturity amount is approximately ₹1,42,732, based on the applicable maturity value for the scheme.
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2. What is ₹1,000 RD in the Post Office for 5 years?
₹1,000 per month for 5 years means total deposits of ₹60,000. At the current RD rate of 6.70% p.a., compounded quarterly, the maturity amount is approximately ₹71,366, based on the applicable Post Office RD maturity table.
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3. What is the interest of ₹1 lakh in the Post Office for 5 years?
₹1 lakh invested for 5 years can earn different returns depending on the Post Office scheme selected. For example, the 5-year Time Deposit currently carries an interest rate of 7.50% p.a., while the RD is designed for monthly deposits. The applicable maturity amount therefore depends on the specific scheme and investment structure.
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4. How can I get ₹5,000 interest monthly in the Post Office?
A deposit of approximately ₹8.11 lakh in a
Post Office Monthly Income Scheme (POMIS) can generate ₹5,000 per month at the current 7.40% p.a. interest rate. MIS pays interest monthly, subject to the applicable investment limits and scheme rules.
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5. Can I double my money in 5 years at the Post Office?
5 years is not enough to double your money under the current Post Office small-savings rates. For example, the Kisan Vikas Patra currently earns 7.50% p.a. and doubles the invested amount in 115 months, or about 9 years and 7 months. Therefore, doubling within 5 years is not possible through this scheme at the current rate.
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6. Can I invest ₹20 lakhs in a Post Office?
₹20 lakh can be invested across eligible Post Office savings schemes, but individual scheme limits apply. For example, the Monthly Income Scheme currently permits up to ₹9 lakh in a single account and ₹15 lakh in a joint account. Other schemes, such as
SCSS, PPF and KVP, have their own limits and eligibility conditions.
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7. How much will ₹50,000 become in 5 years in a Post Office Time Deposit?
₹50,000 invested for 5 years will earn different returns depending on the Post Office deposit scheme chosen. If ₹50,000 is placed in a 5-year Time Deposit at the current 7.50% p.a. rate, the maturity value would be approximately ₹72,497, assuming quarterly compounding and no changes to the applicable rate.
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