The Post Office RD ₹2,000 per month is a 5-year savings scheme. Many investors search for a “post office RD 2000 per month 3 years” plan, but officially, the RD has a fixed 5-year tenure. If closed after 3 years, ₹72,000 would be deposited, and interest is paid as per the Post Office RD premature closure rules, which is lower than the regular 5-year RD rate.
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The Post Office Recurring Deposit (RD) is a fixed-income investment under the Post Office Savings Bank system where investors deposit a fixed amount monthly for a predetermined period and earn compound interest. Since the Government of India backs the scheme, returns remain stable and predictable. Regular contributions promote financial discipline and support systematic wealth creation.
If You Close Post Office RD After 3 Years
Suppose you deposit ₹2,000 per month for 3 years, you will be depositing a total of ₹72,000. Nonetheless, as the RD has a tenure of 5 years, it would not be closed at a time of 3 years, which would be considered premature closure. In such cases, interest is calculated according to the applicable premature closure provisions of the Post Office RD scheme and is lower than the standard 5-year RD interest rate. Therefore, the maturity value will be lower than the 5-year RD calculation, as interest is determined according to applicable premature closure rules of the Post Office RD scheme.
Key Features of Post Office RD Scheme
The Post Office RD scheme has a number of features that make it a flexible and reliable savings tool for the investor. The major characteristics are as follows:
Feature
Description
Minimum Deposit
Minimum amount of monthly deposit is ₹100 in multiples of ₹10.
Maximum Deposit
No fixed maximum amount on monthly deposits.
Government Guarantee
Government-sponsored investment that gives predictable and stable returns.
Nomination Facility
The facility of nomination exists and can be renewed throughout the tenure of the account.
Transfer Facility
Transfer of an account may occur between CBS-enabled Indian Post offices.
Account Continuation
On maturity, account continuation is permitted under the applicable regulations.
Who Can Open the Post Office RD ₹2,000 Per Month for 3 Years?
The Post Office Recurring Deposit scheme supports various account holders regardless of the type of long-term financial goal. 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 parent/legal guardian can open an RD account for a minor (aged below 10 years).
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: 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 Account
In order to open a Post Office RD account, it is possible to do it online via the IPPB app or to go to a Post Office branch.
Online Process (IPPB App)
Opening a Post Office RD account online via the Post Office Payments Bank Mobile application:
Download App: Download the IPPB app from playstore and register.
Open Savings Account: Have an active IPPB Savings Account
Select RD: Choose Recurring Deposit under the DOP Products.
Enter Details: Enter the amount of ₹2,000, nominee details and tenure.
Fund Account: Fund account or set standing instruction.
Confirm: Review the information and activate the RD account.
Offline Process
You may open a Post Office RD account in a local branch and get it done manually:
Visit Branch: Go to a nearby Post Office.
Fill Form: Fill in the RD account opening form.
Submit KYC: Provide identity and address proof.
Select Account Type: Select between single, joint, and minor accounts.
Deposit Amount: Pay the amount of ₹2,000 for the first instalment.
Receive Passbook: Take the passbook, including account details.
Tax Implications on Post Office RD ₹2,000 Plan
The Post Office RD scheme also attracts interest, which is subject to full taxation under the head "Income from Other Sources" as stated in the Income Tax Act. The interest should be declared when filing the income tax returns. Tax Deducted at Source (TDS) is charged when the interest received on bank, co-operative bank, or Post office deposits in the year exceeds ₹50,000 in the case of general citizens and ₹1,00,000 in the case of senior citizens. Further, deposits made under this scheme are not liable to tax deductions under Section 80C as they do not provide upfront tax-saving benefits.
Key Takeaways
The Post Office RD ₹2,000 per month is a 5-year government-supported savings scheme. Investors considering a 3-year exit must note that premature closure rules apply and interest is calculated as per applicable premature closure provisions. This may result in lower returns than the standard 5-year RD rate. The scheme offers loan facility, transferability, and premature closure options, hence it is applicable for short-term financial targets. Interest earned is, however, fully taxable, and the scheme is not subject to applicable tax benefits.
Frequently Asked Questions
Can I withdraw the Post Office RD before completing 3 years?
The RD account may be closed upon completing three years since it was opened. Interest would be paid in accordance with the Post Office RD scheme rules for a premature closure, which could be less than the overall returns.
What will happen in case I miss a monthly instalment of RD?
Late payment of up to four monthly instalments will attract a penalty and extend the maturity period. In case of missing more than four instalments, the account can be discontinued, though it can be reinstated within the given period by paying outstanding instalments as well as relevant fees.
Does the Post Office RD ₹2,000 Plan provide tax benefits?
No, the scheme does not offer tax deductions under Section 80C. Interest is liable to taxation under the category of Income from Other Sources. The TDS is applied when the interest received on an annual basis is more than the stipulated amounts as prescribed by income tax provisions.
˜The insurers/plans mentioned are arranged in order of highest to lowest first year premium (sum of individual single premium and individual non-single premium) offered by Policybazaar’s insurer partners offering life insurance investment plans on our platform, as per ‘first year premium of life insurers as at 31.03.2025 report’ published by IRDAI. Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. For complete list of insurers in India refer to the IRDAI website www.irdai.gov.in
Disclaimer: #The investment risk in the portfolio is borne by the policyholder. Life insurance is available in this product. The maturity amount of Rs 1 Cr. is for a 30 year old healthy individual investing Rs 10,000/- per month for 30 years, with assumed rates of returns @ 8% p.a. that is not guaranteed and is not the upper or lower limits as the value of your policy depends on a number of factors including future investment performance. In Unit Linked Insurance Plans, the investment risk in the investment portfolio is borne by the policyholder and the returns are not guaranteed. Maturity Value: ₹1,05,02,174 @ CAGR 8%; ₹50,45,591 @ CAGR 4%. *Tax benefits and savings are subject to changes in tax laws. All plans listed here are of insurance companies’ funds.
Past 10 Years' annualised returns as on 01-02-2026
^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.
Tax benefit is subject to changes in tax laws. Standard T&C Apply
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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).
Generate wealths Earn 1 Cr# in maturity with Zero LTCG tax¶
Double tax savings^ On premiums (under 80C) and on maturity (under 10(10D)
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