The Post Office RD Scheme 1000 per month provides fixed returns and government backing. It provides a consistent investing approach for low-risk investors. With the current interest rate of 6.70% per annum (compounded quarterly), a ₹1000 monthly deposit could grow into a significant corpus.
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The Post Office RD scheme 1000 per month, is governed by India Post. It is intended to assist depositors in building a corpus through small, consistent monthly investments. As an investor, you must make a minimum deposit of ₹100. The deposits can be made in multiples of ₹10. The Post Office Recurring Deposit scheme is originally structured for 5 years. Investors may reinvest or extend upon maturity to build savings over a longer tenure, such as 10 years. It suits homemakers, salaried professionals, and small business owners searching for safe returns free from market risks.
Key Features of the Post Office RD Scheme 1000 Per Month
The essential features of the Post Office RD scheme 1000 per month are listed in the following table:
Features
Description
Default Fee
A default fee of ₹1 per ₹100 is charged for each missed monthly deposit. The RD account is discontinued if there are more than four defaults (i.e., at the fifth default). However, it can be renewed within two months from the month of the fifth default, subject to payment of the defaulted instalments and applicable fees, as per Post Office Savings Bank (POSB) rules.
Advanced Deposit
The Post Office RD scheme allows a rebate (for six or twelve months) for deposits for not less than six monthly instalments that may be made in advance. But a rebate is specific, not always “governed by POSB rules” generically. You can refer to the official POSB guidelines for the exact rebate rates and conditions.
Loan
After one year of regular deposits, investors may be eligible to borrow up to 50% of their Post Office RD account balance. The interest on such loans is typically set at a margin above the RD interest rate, per prevailing rules. The Post Office Savings Bank (POSB) guidelines govern loan repayment terms and eligibility.
Premature Closure
Premature Post Office RD account closure is permitted only three years after opening. In such cases, the interest payable is calculated at the prevailing Post Office Savings account rate, not the RD rate. This may lead to lower returns compared to completing the full tenure.
Deposit Amount and Maturity Calculation
You get a sizable return if you deposit ₹1000 per month in the Post Office RD Scheme and keep it invested for 5 or 10 years. This is possible since the scheme involves a 6.70% yearly interest rate. The same is compounded quarterly; for example, each quarter’s interest is added to the principal and reinvested.
Here’s the formula to estimate the results:
The Deposit Amount and Maturity Calculation works based on the following formula
M = R × [(1 + i)^n − 1] / [1 − (1 + i)^(-1/3)]
Terms used in Deposit Amount and Maturity Calculation
Number of quarters = Total months ÷ 3 (for 5 years = 60 ÷ 3 = 20)
As per the above formula, the maturity amount comes out as approx. ₹71,366.
In the above calculation, it is assumed that monthly deposits are consistent and defaults are absent. India Post recommends using the official Post Office RD calculator or referring to the maturity tables provided in the Post Office RD rules for accurate results.
Thus, the India Post Office RD Calculator can help you check how deposit amounts vary based on durations.
Who Can Open the Post Office RD Scheme 1000 Per Month?
The Post Office RD scheme 1000 per month is easily accessible to various depositors. Here are the eligibility criterias to consider:
Category
Eligibility criteria
Individual Residents
Any Indian citizen aged 18 and above can open an RD account in their own name.
Minors (10+ years)
Children aged 10 or above can open and operate the account independently.
Guardians for Minors
Parents or legal guardians can open accounts for minors below 10 years old.
Guardians for Special Needs
Under this scheme, legal guardians can open accounts for minors or persons of unsound mind, as permitted under the Post Office Savings Bank (POSB) rules. The guardian is responsible for operating the account and managing deposits until the holder is legally eligible.
Joint Accounts
Up to three adults can jointly hold a Post Office RD account. As per the Post Office Savings Bank (POSB) General Rules, joint accounts may be operated in two modes:
Joint A: Operated jointly by all or surviving depositors in case of death.
Joint B: Operated by any one depositor or the surviving depositor.
Multiple Accounts
Customers may open multiple RD accounts, either singly or jointly.
Note: If minor account holders are 18 or above, they must submit an Account Opening Form and updated KYC documents. This is necessary to transform their account into an adult account.
Step-by-Step Process to Open a Post Office RD Scheme 1000 Per Month
It is quite simple to open a Post Office Recurring Deposit (RD) account; the corresponding steps are:
Step 1: Approach a nearby Post Office
Reach any Post Office branch that supports RD services and savings services. You can find these branches via India Post’s official site.
Step 2: Get and fill out the opening form
At the counter, inquire for the RD opening form and fill it with your personal and nominee's details.
Step 3: Document submission
Make sure that your form is attached with self-attested copies of the documents below:
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 recent passport-size photographs
Initial Deposit
₹1000 either as cash or cheque (for the initial instalment) (the scheme’s minimum deposit required is ₹100 denomination overall.)
Step 4: Choose the type of account
Select any of these:
A Single Account
A Joint Account (for up to 3 adults)
An account on behalf of a minor
You can also choose between Joint A (operated jointly) or Joint B (operated individually).
Step 5: Issuance of passbook
Upon verification, the Post Office will provide you with an RD passbook. It will contain details like the interest rate, your account number, and the deposit schedule. Also, you will get a receipt for the initial deposit.
Step 6: Setting up standing instructions (Optional)
To automate monthly deposits, link your account, set up standing instructions, or use mobile banking.
Tax Treatment for Post Office RD Scheme 1000 Per Month
Deposits made into the Post Office RD account do not qualify for deductions under Section 80C of the Income Tax Act. Interest earned from the Post Office RD scheme is fully taxable per the investor’s income tax slab. Since 1 June 2015, recurring deposits are classified as “time deposits” under Section 194A of the Income Tax Act. India Post may deduct Tax Deducted at Source (TDS) if the total interest across all Post Office time deposits exceeds ₹50,000 (₹1,00,000 for senior citizens) in a financial year. Investors should include the interest income in their annual tax filings, even if TDS is not triggered.
Key Takeaways
Post Office RD Scheme 1000 Per Month, launched by the Indian Post Office, signifies a safe savings opportunity for all those investors aiming for consistent returns with low risk. The interest earned is taxable and not eligible for deduction under Section 80C. Premature closure is allowed only after three years and may result in interest penalties. Apart from this, the scheme provides loan facilities, flexible account types, the facility of premature withdrawal, and tax benefits. It offers fixed returns and is backed by the government. The Post Office RD Scheme is convenient for long-term objectives like weddings, education, or emergency planning.
FAQs
What does investing ₹1000 RD in the Post Office mean for 5 Years?
Investing ₹1000 per month in the RD scheme by the Post Office at a 6.70% interest rate for 5 years means the total deposit would be ₹60,000. Assuming no withdrawals, defaults, or loans against the deposit, the estimated maturity amount would be approximately ₹71,366, including ₹11,366 in interest earned.
Explain the monthly investment of ₹3000 in the Post Office RD?
Investing ₹3000 per month consistently for 5 years means the total investment will reach ₹1,80,000. When calculated at 6.70% interest, ₹2,12,749 will be the approximate amount. The maturity amount and the earned interest will be ₹32,749.
Can I get ₹5000 interest per month in the Post Office?
If you wish to have ₹5000 earnings per month as interest, you must have a considerable corpus amount. Suppose the annual interest rate is 6.70% then you would require approximately. ₹9 lakh to ₹10 lakh to be invested in a Post Office scheme (for example, the MIS (Monthly Income Scheme)). Remember that RD schemes are meant for wealth accumulation, not monthly income building.
What does the ₹2000 per month Post Office scheme mean?
Investors looking for mid-term financial planning (without market risk) can invest ₹2000 each month in the RD plan by the Indian Post Office. When invested for 5+ years, the total deposit would be ₹1,20,000. Considering the 6.70% interest rate, the maturity amount's value would be nearly ₹1,42,732, with ₹22,732 as earned interest.
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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 01-09-2025
^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 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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