The Post Office Recurring Deposit (RD) interest rate for the October to December 2026 quarter has been announced at 6.7%, remaining unchanged from previous quarters. This rate applies to new accounts opened during this period and will be fixed for the full five-year term of the deposit.
- The interest rate for Post Office RD is 6.7% for October-December 2026.
- Monthly instalments start at ₹100 and continue for 60 months.
- Interest is compounded quarterly.
- Premature closure is allowed after three years of account operation.
- Loans up to half the balance can be taken after 12 instalments.
- The interest rate is linked to the 5-year government securities (G-sec) rate.
What is the Post Office Recurring Deposit scheme?
The Post Office Recurring Deposit scheme allows individuals to save money by depositing a fixed amount every month for a period of five years. The minimum monthly instalment is ₹100. The interest earned is compounded quarterly, which helps the investment grow faster over time.
How is the interest rate for Post Office RD determined?
The interest rate on Post Office RD is calculated based on the average yield of 5-year government securities (G-sec). A committee led by Shyamala Gopinath recommended this method to align small savings rates with market conditions. For the July-September 2026 quarter, the average 5-year G-sec yield was about 6.5%. Adding a 0.25% spread results in an implied rate of approximately 6.75%, which is slightly higher than the actual 6.7% rate offered.
Can I close my Post Office RD account before maturity?
Yes, premature closure of the Post Office RD account is allowed, but only after the account has been active for at least three years. This provides some flexibility for depositors who may need access to their funds before the full five-year term ends.
Are there any loan facilities available against the Post Office RD?
After making at least 12 monthly instalments, account holders can avail a loan of up to 50% of the balance in their RD account. This feature helps depositors meet urgent financial needs without closing their account.
Does the Post Office RD offer any tax benefits?
The Post Office RD scheme does not provide any tax benefits under the Income Tax Act. Interest earned on the deposit is taxable as per the depositor's income tax slab.
What happens to the interest rate after the maturity of the RD?
After maturity, if the account is extended, it continues to earn interest at the rate that was applicable when the RD was originally opened. This ensures that depositors do not face a sudden change in returns upon renewal.
How does the Post Office RD rate compare with bank recurring deposits?
With several rate cuts by the Reserve Bank of India during 2025, many bank recurring deposit rates have declined. The Post Office RD rate of 6.7% remains competitive and is considered one of the better options available in the market for recurring deposits.
