How much will I receive by investing â¹2,000 per month for 5 years?

An initial investment of â¹1,20,000 can accrue about â¹1,42,732 at 6.7% annual interest with total interest of approximately â¹22,732 over 5 years.

Can I close the RD account before 5 years?

Yes, it can be prematurely closed 3 years after the account opening date. Interest is, however, charged at the rate of a savings account, which is lower than the interest rate charged on RD.

What happens if I miss monthly instalments?

It permits up to four missed monthly instalments with a prescribed penalty. In case of an additional instalment missed, the account could be discontinued or revived on specific conditions.

Does the Post Office RD â¹2,000 plan provide tax benefits?

No, deposits made on the Post Office RD â¹2,000 plan are not subject to tax deductions under Section 80C. Along with that, the interest collected is subject to income tax regulations.

Post Office RD ₹2,000 Per Month 5 Years

The ₹2,000 per month in a Post Office Recurring Deposit (RD) for 5 years (60 months) results in a total investment of ₹1,20,000. It is a government-supported savings programme that helps individuals to accumulate a fixed corpus through monthly deposits.

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What is the Post Office RD ₹2,000 Per Month 5 Year Scheme?

The Post Office Recurring Deposit (RD) is an investment product offered by India Post Payments Bank that requires the depositor to invest a certain amount on a monthly basis over a given term and receive compound interest. Regular investment builds discipline to save and promotes systemic wealth generation throughout the investment process.

Returns on ₹2,000 Monthly Investment for 5 Years

Recurring deposits grow through quarterly compounding, meaning every instalment earns interest until maturity.

Investment Details

Investing ₹2,000 per month in the Post Office RD scheme for a 5-year period (60 months) gives a total investment of ₹1,20,000. The savings increase with time at the current interest rate of 6.7% p.a. compounded quarterly.

At this interest, the investment is projected to yield about ₹22,732 in interest, so that the value of the investment at the maturity of the tenure is estimated to be about ₹1,42,732. The final value can change marginally according to changes in interest rates.

Key Features of Post Office RD Scheme

Post office RD scheme could be considered a convenient and secure way of saving money, as it has a number of features that can be used by investors.

Feature	Description
Minimum Deposit	Minimum monthly deposit of ₹100 in multiples of ₹10.
Maximum Deposit	There are no restrictions on the maximum deposit per month.
Government Guarantee	Investment with predictable and stable returns supported by governments.
Nomination Facility	Nomination may be introduced or changed during account tenure.
Transfer Facility	Transfers between CBS-enabled Post Offices in India are possible.
Account Continuation	The continuation of accounts after maturity is allowed according to the regulations.

Loan, Default, and Withdrawal Rules on ₹2,000 Monthly Investment for 5 Years

The scheme is flexible and promotes regular savings.

Loan Facility

A loan of 50% of total deposits may be availed by the depositor after the account has completed a year and 12 instalments. The loan will be repaid either in lump sums or in instalments, and the interest is charged at 2% above the RD rate applicable at the time of account opening.
Default Rules

Up to four missed monthly instalments are allowed with penalty charges. If more than four instalments are missed, the account may be discontinued, but can be revived within the prescribed period by paying pending instalments with applicable fees.
Premature Closure

The RD account can be closed prematurely after three years from the account opening date. Interest is then calculated at the Post Office Savings Account rate instead of the RD rate. Premature closure is not allowed for advance deposit periods.

Who Can Open the Post Office RD ₹2,000 Per Month for 5 Years?

The scheme supports various categories of account holders under the Post Office Savings Bank rules.

Category	Eligibility Criteria
Single Adult	Any resident Indian aged 18 years or above.
Guardians for Minors	A parent or legal guardian can open an account for a minor.
Minors (10+ years)	Minors aged 10 years or above can operate an account independently.
Joint Accounts	Up to three adults (Joint A or Joint B).
Guardians for Special Needs	Guardian can operate an account for a person of unsound mind.
Multiple Accounts	Individuals can open multiple RD accounts singly or jointly.

Notes:

Minor accounts must be converted to adult accounts after attaining 18 years with updated KYC.
Only resident individuals are eligible to open accounts.
NRIs cannot open new RD accounts, but existing accounts may continue under certain conditions.

How to Open a Post Office RD Account

The account can be opened online on the IPPB app or offline at a Post Office branch.

Online Process (IPPB App)

You will need to follow the following steps to open a recurring deposit account via the IPPB mobile app:
- Download and Log in: Install and Sign in to the IPPB mobile application.
- Check Savings Account: You need to make sure that your IPPB savings account is active.
- Select Recurring Deposit: Choose the RD in the DOP Products.
- Enter Details: Add ₹2,000 amount, tenure, and nominee.
- Fund or Set Auto Payment: Make a payment or enable auto pay.
- Confirm Activation: Check the information and activate the account.
Offline Process

The other method through which you can open a recurring deposit account is by visiting the local branch of the post office and following these steps:
- Visit the Post Office Branch: Go to your closest Post Office.
- Fill the RD Account Opening Form: Fill in the required application.
- Submit KYC Documents: Provide address and identity documents.
- Select Account Type: Choose single, joint, or minor account.
- Deposit First Instalment: Pay the initial ₹2,000 amount.
- Receive Passbook: Take your account passbook with account details in it.

Taxation on Post Office RD ₹2,000 Plan

The amount of interest on the Post Office Recurring Deposit (RD) scheme is taxable under the head of Income from Other Sources and is required to be reported when filing income tax returns. Tax Deducted at Source (TDS) applies if the total annual interest post office deposits exceed ₹50,000 (₹1,00,000 for senior citizens). Investors must be aware that deposit made under the Post Office RD scheme is not entitled to any benefit of tax deduction under Section 80C.

Key Takeaways

Post Office RD ₹2,000 per month is a government-guaranteed savings facility, which offers regular and predictable returns due to quarterly compounding. It promotes disciplined monthly investments with flexible account opening, a loan facility, and is offered throughout the country.

Frequently Asked Questions

How much will I receive by investing ₹2,000 per month for 5 years?

An initial investment of ₹1,20,000 can accrue about ₹1,42,732 at 6.7% annual interest with total interest of approximately ₹22,732 over 5 years.
Can I close the RD account before 5 years?

Yes, it can be prematurely closed 3 years after the account opening date. Interest is, however, charged at the rate of a savings account, which is lower than the interest rate charged on RD.
What happens if I miss monthly instalments?

It permits up to four missed monthly instalments with a prescribed penalty. In case of an additional instalment missed, the account could be discontinued or revived on specific conditions.
Does the Post Office RD ₹2,000 plan provide tax benefits?

No, deposits made on the Post Office RD ₹2,000 plan are not subject to tax deductions under Section 80C. Along with that, the interest collected is subject to income tax regulations.

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^The tax benefits under Section 80C allow a deduction of up to ₹1.5 lakhs from the taxable income per year and 10(10D) tax benefits are for investments made up to ₹2.5 Lakhs/ year for policies bought after 1 Feb 2021. Tax benefits and savings are subject to changes in tax laws.

*All savings are provided by the insurer as per the IRDAI approved insurance plan.

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^^The information relating to mutual funds presented in this article is for educational purpose only and is not meant for sale. Investment is subject to market risks and the risk is borne by the investor. Please consult your financial advisor before planning your investments.

¶Long-term capital gains (LTCG) tax (12.5%) is exempted on annual premiums up to 2.5 lacs.

**Returns are based on past 10 years’ fund performance data (Fund Data Source: Value Research).