The Post Office RD ₹4,000 per month for 5 years is a government-backed savings scheme that allows individuals to build a disciplined investment corpus through fixed monthly deposits. A monthly contribution of ₹4,000 over five years results in a total investment of ₹2,40,000. At the current interest rate of 6.7% per annum, compounded quarterly, the estimated maturity value is approximately ₹2,85,420.
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Generate wealthEarn 1 Cr# in maturity with Zero LTCG tax¶
Double tax savings^On premiums (under 80C) and on maturity (under
10(10D))
The ₹4,000 monthly scheme, a Post Office of RD product, enables investors to deposit any amount at a fixed rate every month for up to 5 years. The interest is calculated on each monthly instalment based on the date of deposit until maturity under quarterly compounding. As the scheme is supported by the Government of India, the returns are stable and predictable.
The monthly deposits promote discipline and systematic wealth building over the long term. They are usually used to save towards a goal, whether it is education, emergency funds or unforeseen future spending.
Growth of ₹4,000 Monthly Investment Over 5 Years
Recurrent deposits are compounded quarterly, and one instalment earns interest on the remaining tenure until it matures. The maturity value will vary according to the rate of interest being charged, the tenure and the deposit amount.
The RD maturity works on the basis of the following formula
Post Office RD scheme is a designed savings scheme that has flexible operational features.
Quarterly Compounding: The interest on the recurring deposit is calculated quarterly, which makes the total returns higher with time, and the investor can accumulate a higher amount at maturity with the help of the constant monthly deposits.
Nomination Facility: Investors are allowed to add or update the nominee details at any time as long as the account is held. Making fund transfer to the nominated person hassle-free in case of any unexpected situations.
Minimum Deposit Requirement: The plan requires a minimum monthly deposit of ₹100 in multiples of ₹10, so it is suitable for investors with different saving capacities and financial objectives.
Transfer Facility: RD accounts can be transferred across India Post post offices in case the account holder wants to move to a different place of residence during the tenure of the RD.
Account Extension Option: On completion of the first five-year tenure, the RD account can be extended according to Post Office rules so that investors can continue saving and earn further interest.
Default Penalty: A penalty is charged at ₹1 per ₹100 of any missed instalment, and this will motivate regular deposits, but still give the flexibility in case of a temporary shortfall in funds.
No Maximum Deposit Limit: The scheme does not specify any maximum limit on monthly deposits, and thus, investors could deposit more according to their financial capability.
Who Can Open a Post Office RD ₹4,000 Account?
Eligible persons under the Post Office Savings Bank are:
Single Adult Account: A Post Office RD account can be opened in the name of any individual resident who is aged 18 years and above.
Joint Account Holders: Up to 3 adults may jointly open an RD account and share the duty of investment and easily manage the accounts according to the rules.
Minor Account: A Minor over 10 years of age can open and operate a minor account on their own, or the guardian may manage the minor account on their behalf.
Guardian for Person of Unsound Mind: An RD account can be opened by someone who has been declared of unsound mind and operated by a legally appointed guardian.
Multiple Account Option: One can have multiple Post Office RD accounts, either singular or joint, according to the individual or joint plans of saving and investing.
Account Opening Process
The Post Office RD ₹4,000 is an account that can be opened online or offline.
Online Method (IPPB Mobile App)
You can use the IPPB mobile app to open a Post Office RD ₹4,000 account online by following these steps:
Download and Log in: Install the IPPB app and log in.
Check Savings Account: Make sure your IPPB savings account is active.
Select Recurring Deposit: Select RD under DOP Products.
Enter Account Details: Enter the ₹4,000 amount, tenure, and nominee.
Fund or Enable Auto Debit: Fund your account or enable auto debits.
Confirm Activation: Check your details and activate your account.
Offline Method (Post Office Branch)
For opening a post office RD ₹4,000 account in india offline, you have to go to the post office and follow the steps below:
Visit Post Office Branch: Visit your local Post Office Branch
Fill Application Form: Fill in the application form for opening an RD account.
Submit KYC Documents: Submit the proof of identity and address.
Select Account Type: Choose a single, joint, or minor account.
Deposit First Instalment: Pay the first sum of ₹4,000.
Receive Passbook: You would be issued a passbook containing the details of your account.
Loan, Default, and Premature Closure Rules
The scheme provides flexibility while encouraging regular deposits.
Default Rules
If four consecutive monthly instalments are missed, the account becomes discontinued. It may be revived within the prescribed period by paying the pending instalments along with the applicable default penalty.
Loan Facility
Depositors can avail a loan of up to 50% of the balance in the account after completing 12 monthly instalments. Interest is charged at 2% above the RD rate. If the account balance reaches approximately ₹48,000 after one year, a loan of up to ₹24,000 may be available.
Premature Closure
Premature closure is permitted after three years. In such cases, interest is calculated at the prevailing Post Office Savings Account rate (currently 4% per annum) instead of the RD rate.
Taxation on Post Office RD ₹4,000 Plan
Interest on the Post Office Recurring Deposit scheme is subject to taxation under the head of Income from other Sources and is obligatory to be reported when filing income tax returns. The Tax Deducted at Source (TDS) can be applied in case the total interest of eligible deposits is over ₹50,000 in case of general citizens and over ₹1,00,000 in the case of senior citizens. The deduction of TDS is usually 10% when PAN is submitted. The scheme does not receive any tax deductions on deposits as provided in Section 80C of the Income Tax Act.
Key Takeaways
The Post Office RD ₹4,000 monthly for 5 years offers constant returns, monthly payments and quarterly compounding yield that is secured by the Government of India. The scheme helps in disciplined savings that have certain flexible provisions, including the different types of accounts, a loan facility provision, and simple account transfer. It is a safe way of saving money; however, the interest that is earned is subject to tax.
Frequently Asked Questions
How much will I receive by investing ₹4,000 per month for 5 years?
A total investment of ₹2,40,000 may grow to approximately ₹2,85,420 at 6.7% annual interest compounded quarterly. The estimated interest earned over the five-year tenure is around ₹45,420, depending on applicable rates.
Can I miss monthly payments in the Post Office RD ₹4,000 scheme?
Yes, up to four missed monthly instalments are allowed by paying the prescribed penalty. If more instalments are missed, the account may become discontinued, but can be revived within the specified period.
Is it possible to withdraw money from the RD account before maturity?
The Post Office RD account may be prematurely closed after 3 years of opening. However, it attracts interest at the Post Office savings account rate, which is lower than the RD rate.
Is there any limit to the number of Post Office RD accounts that I can open?
No, customers can have as many Post Office RD accounts as they desire, either individually or jointly. This will allow the investors to save towards other financial needs in terms of separate recurring deposits.
˜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
++Source - Google Review Rating available on:- http://bit.ly/3J20bXZ
^^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 wealth 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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