Post offices in India perform a range of functions beyond just delivering mails. As a result of its wide reach, post offices also provide services like banking and insurance to the remotest parts of India. One of its most well-know banking services is the post office recurring deposits scheme.
The 5 year Post Office Recurring Deposit (PORD) scheme allows you to save on a regular monthly basis for 5 years i.e. 60 monthly installments. These deposits earn interest as per applicable rate compounded on a quarterly basis. It is ideal for individuals with regular income who wish to stock up their savings through regular monthly deposits of a fixed amount for a certain period of time.
Post Office Recurring Deposit Interest Rates
The PORD interest rate in Q2 FY 2018-19 is 6.9% with the revised rate of 7.3% applicable in Q3 FY 2018-19. The following are the historical 5 Year Post Office Recurring Deposit Interest Rates*.
| Period | Applicable Interest Rate on 5 Year PO RD |
| 1st April 2018 – 30th June 2018 | 6.9% |
| 1st January 2018 – 31st March 2018 | 6.9% |
| 1st October 2017 – 31st December 2017 | 7.1% |
| 1st July 2017 – 30th September 2017 | 7.1% |
| 1st April 2017 – 30th June 2017 | 7.2% |
*The applicable interest rates are subject to change as per government announcements. Post Office RD investments are compounded on a quarterly basis.
Key Features
- Minimum installment Rs.10. Higher deposits in multiples of Rs.5.
- No maximum limit on deposit amount.
- Nomination facility available.
- Rebate available on advance payment of 6 or more RD installments.
- Sole/joint operation allowed.
- Interest on RD compounded quarterly.
- Missed deposits will incur a default fee (Re.0.05/Rs.5 deposit defaulted).
- Prematurely closure allowed after three years.
- Easily transferable from one post office to another.
- Withdrawal of up to 50% of account balance allowed once after completion of 1 year.
Eligibility Criteria
The following are key eligibility criteria for opening a 5 Year Post Office Recurring Deposit:
- Indian nationals over 18 years may singly or jointly operate a 5 year PORD account.
- Minors aged 10 years and above can hold/operate the account jointly with guardian.
- Parent/guardian can open this account on behalf of a minor.
Account Extension Options
When a post office recurring deposit matures after completion of 5 years/60 months, account holders have the option to extend the deposit for 5 additional years on a year-to-year basis.
Cut-Off Dates for Deposit into 5 Year PORD Account
If the PORD Account has been opened between the 1st and 15th of the month timely deposits need to be made by the 15th of each calendar month. If the account was opened after the 16th of the month, timely deposits can be made till the last day of the month.