NSRD (National Saving Recurring Deposit Scheme)

Updated: 03-01-2025 06:29:57 AM

National Saving Recurring Deposit is a saving scheme regulated by Indian Government to cater the small investors and help them accumulate enough funds for their respective financial requirements. One can open a NSRD account with a minimum amount of Rs.10. Small Investors who are willing to invest for future but are reluctant to take any risks, can open a Recurring Deposit Account. Also, this account can be opened as a single as well as a joint account.

Features of NSRD

• The NRSD account can be opened with as low as Rs.10 while there is no maximum limit
• Any Indian adult can open a National Savings Recurring Deposit
• The rate of interest offered on a National Saving Recurring Deposit is defined by the government on a quarterly basis
• The deposits have a fixed maturity period of 5 years
• The depositors are also given an option of withdrawing a part of their balance before their deposit matures

Eligibility Conditions

The following individuals can open a National Savings Recurring Deposit-

• Any single adult
• Upto two adults jointly
• A guardian on behalf of a minor
• A guardian for an individual with mental illness
• A minor who has attained the age of 10 years

Opening a National Saving Recurring Deposit Account

• An individual can open more than one NSRD accounts individually or jointly with another individual 
• Individuals can open an NSRD account with a minimum of Rs.10 or any amount in multiples of 10, with no maximum limit
• Eligible individuals must submit an application in Form-1 to the accounts office in order to open the account

Deposits to be made in National Saving Recurring Account

• An account holder is required to make at least 60 deposits in a month
• The minimum amount for a monthly deposit shall be Rs.100 or any amount in multiples of 10
• The first monthly deposit should be made at the time of opening the account
• The amount of first deposit shall be the denomination of the account
• If the account is opened before the sixteenth day of the month, then the subsequent deposits equal to the first deposit shall be made upto the fifteenth day of each month
• On the other hand, if the account is opened between the sixteenth day and the last day of the month, the deposit shall be made upto the last working day of the month
• If an account holder has more than 4 defaults in monthly deposits, his account shall be treated as discontinued. In such a case, the account shall be revived only within 2 months from the month of fourth default
• Additionally, a revival fee at the rate of one rupee for every hundred rupees of a defaulted installment for each month of default shall be paid along with the deposit in lump sum
• If an account holder had made no defaults, he is allowed to make advance deposits in any month and earn rebate on the same
• The advance deposits can be made at any time, while opening the account or any time thereafter

Rebate on National Saving Recurring Deposit

• The account holder will earn rebate of Rs.10 on six or more advance deposits made (not more than eleven) in a month
• If an account holder makes twelve or more advance deposits in a month, he shall earn a rebate of Rs.40 for every twelve deposits and Rs.10 for the remaining, if any
• However, if advance deposits are made for a period of less than 6 months, no rebate shall be allowed 
• The rebate for six monthly deposits or more advance deposits may be given to the account holder irrespective of whether the amount was deposited in lump sum or not
• If the deposits are made on different dates, the rebate amount shall be pa” at the time of the advance deposit for six or more months

Premature Closure of National Saving Recurring Deposit

• The account holder may apply for the closure of his account prematurely, after a time period of 3 years with simple interest at the rate of Post Office Saving Account
• To apply for the same, he/she must submit Form-2 in the account office
• It must be noted that no premature closure of the account will be allowed until the period for which advance deposits have been made

Maturity of National Saving Recurring Deposit

• Premature withdrawal of a maximum of 50% of the account balance is facilitated after one year from the date of opening the account
• In case of the death of the depositor, the maturity value allowed on RD accounts is restricted to that of 50/- denomination, subject to the fulfillment of certain conditions
• After the completion of the maturity period of 5 years, the depositors can choose to continue with or without making any deposits
• The depositors of NSRD have an option to make advance deposits for 6 months or 12 months and earn rebate on the same
• In order to apply for repayment of maturity amount, the account holder must submit Form 3 with the accounts office
• The account holder has the option to extend his maturity duration by as many months as the maturity period if he does not have any more than 4 defaults in monthly deposits. He can then deposit his defaulted installments during the extended period
• In order to extend the maturity period for a further period of upto 5 years, an account holder must submit Form-6 with the accounts office