Post Office Recurring Deposits

 

Post Office Recurring Deposits 
 
Returns 

Revised interest rates for the financial year 2014-15

Schemes  Revised Rates from 1st April 2014 (%) Existing rate for 2013-2014 (%)
Post office Savings Deposit 4 4
1- Year Time Deposit 8.4 8.2
2 - Year Time Dposit 8.4 8.2
3- Year Time Deposit 8.4 8.3
5-Year TimeDeposit 8.5 8.4
5 -Year Recurring Deposits 8.4 8.3

Recurring Deposits to Attract TDS

The Union Budget presented by Finance Minister Arun Jaitley proposes to bring recurring deposits under the provisions of TDS (tax deducted at source). As a result, if interest earned on recurring deposits exceeds Rs. 10,000 a year, TDS at the rate of 10 per cent would be deducted by the bank.   Recurring deposit is a special kind of deposit offered by banks and post offices in which investors deposit a fixed amount every month into their accounts. Some banks offer recurring deposits for tenures of up to 10 years.  The proposal to tax recurring deposits, a favourite saving instrument for salaried and middle class Indians, will come into effect from June 1.

A five year Post Office Recurring Deposits the interest rate applicable for 2013-14  is 8.30% (for 2012-13  this was 8.40%)

Investment Limitation 
Min Amount Rs. 10/-
 
Max Amount No Limit
 
Denominations Rs. 5/- 
Scheme Availability 
All through the year. 
Mode of Operation 
Single 
Joint (Two or more) 
Minor with parent/guardian 
Tenure of Investment 
P. O. Recurring Deposit has an investment period of 5 years. 
Nomination 
Facility is there at the time of opening the account or anytime during the tenure of the account. 
Premature Encashment 
Is permitted if deposit, the interest rate applicable will be that which is prevailing at that time 
Loss of Passbook 
A pass book is issued at the time of opening the account. If there is a loss, theft or the passbook is mutilated, a duplicate is issued on a charge. 
Tax Benefits 
 Tax benefits are available  under section 80C of Income Tax Act. 

Recurring deposits: Any individual can open a recurring deposit account. The minimum investment to be made in such account is Rs 10 with no upper limit. A depositor generally makes 60 deposits over a term of five years. The rate of interest available is 8.3 per cent from April 1. The entire amount along with interest can be withdrawn after five years. Interest income is liable to tax, but the investment is not chargeable to wealth tax. 

Recurring Deposit Account

  • Any individual (a single adult or two adults jointly) can open an account.
  • Advance Deposits earn rebate.
  • Four defaults are allowed.
  • Rate of interest 8.40%   (for financail year 2014-15)
  • Defaults can be paid within two months.
  • Part withdrawal facility available.
  • Premature closure allowed after three years.
  • Pay Roll Savings Scheme is also available for employees of various Establishments.

 

Type of Account

Minimum Deposit

Maximum Deposit

Individual Account

INR. 10/- and in multiples of INR. 5/- thereafter

No limit.

Small Savings Deposits Interest Rates from 01-04-2016 to 30-06-2016

Savings Deposit

Rate of interest w.e.f. 01.04.2015 to 31.3.2016

Rate of interest w.e.f. 01.04.2016 to 30.6.2016

Savings Deposit

4

4

1 Year Time Deposit

8.4

7.1

2 Year Time Deposit

8.4

7.2

3 Year Time Deposit

8.4

7.4

5 Year Time Deposit

8.5

7.9

5 Year Recurring Deposit

8.4

7.4

5 Year Senior Citizens Savings Scheme

9.3

8.6

5 year Monthly Income Account Scheme

8.4

7.8

5 Year National Savings Certificate

8.5

8.1

Public Provident Fund Scheme

8.7

8.1

Kisan Vikas Patra

8.7

7.8 (will mature in 110 months)

Sukanya Samriddhi Account Scheme

9.2

8.6

Cheque clearance date will be date of deposit in post office RD

Central government amend the rules of post office monthly deposit scheme with the amendment in rule 8 vide notification no. 221 dated 13 March 2014. Now the date of clearance of cheque will be treated as deposit date in monthly deposit scheme(Recurring deposit RD). There are also some changes in the rule of default in depositing the monthly installment in posit office monthly deposit scheme. Full notification is as under.

In exercise of the powers conferred by Section 15 of the Government Savings Bank Act, 1873 (5 of 1873), the Central Government hereby makes the following rules further to amend the Post Office Recurring Deposit Rules, 1981, namely:—

1. (1) These rules may be called the Post Office Recurring Deposit (Amendment) Rules, 2014.

(2) They shall come into force on the date of their publication in the Official Gazette.

2. In the Post Office Recurring Deposit Rules, 1981,

(i)    in rule 6, for sub-rule (4), the following sub-rule shall be substituted, namely:—

  "(4) Where a deposit is made by means of a cheque, pay order or demand draft, the date of its clearance into the Post Office Savings Bank shall be deemed to be the date of deposit."

(ii)    in Rule 7, for sub-rule (2), the following sub-rule shall be substituted, namely:—sub-rule (2) of Rule 7 shall be substituted by the followings:—

  "(2) If there are more than four defaults, the account shall be treated as discontinuedand revival of the account shall be permitted only within a period of two months from the month of fifth default and in case a depositor fails to deposit next monthly depositwithin the time prescribed in sub-rule (3) of rule 6, a default fee at the rate of five paise for every five rupee per defaulted deposits shall also be paid along with regular monthly deposit.

  (3) An account, in which all defaulted deposits are deposited with prescribed default fee and prescribed time as specified in sub-rule (2) shall not be treated as discontinued:

  Provided that notwithstanding anything contained in sub-rule (1), sub-rule (2) in the case of personal of Defence Services (excluding Civilian Defence Employees).

(i)    if there are not more than seven defaults in the monthly deposits, the depositor may, at his option, extend the maturity period of the account by as many months as the number of defaults and deposit the defaulted deposits during the extended period.

(ii)    If there are more than seven defaults in the monthly deposits, the account shall be treated as discontinued and the revival of the account shall be permitted only within a period of two months from the month of eighth default, subject to payment of default fee and defaulted deposits."

Tags-post office monthly deposit scheme ,post office deposit ,post office deposit rate, post office interest ,post office interest rate

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