Post Office Recurring Deposit Interest Rate 2026
The Post Office Recurring Deposit is built for a habit most savers struggle to keep: putting a fixed amount aside every single month. It asks for as little as ₹100 a month, guarantees the return, and turns small, steady deposits into a meaningful sum after five years.
For households without a lump sum to invest but with a regular income, the RD is often the first real step into disciplined saving. It carries the same Government of India backing as every other Post Office scheme, which makes it a zero-risk way to build a corpus from monthly cash flow.
This guide explains how the Post Office RD works in 2026 - the current interest rate, how maturity is calculated, the loan and withdrawal rules, how to open it, and how it compares with a bank RD.
What a Recurring Deposit is
A Recurring Deposit is a savings account into which a fixed amount is paid every month for a set term, earning a guaranteed rate, with the total plus interest returned at maturity. Unlike a fixed deposit, which takes a lump sum, the RD is built for savers who put money aside from monthly income.
The Post Office RD runs for five years and pays a government-guaranteed rate, turning a small monthly habit into a known corpus. It is the scheme of choice for building savings gradually rather than all at once.
Post Office RD interest rate 2026: 6.7% for the April-June quarter
The Post Office Recurring Deposit pays 6.7% per annum for the April-June 2026 quarter, compounded quarterly, unchanged for the eighth consecutive quarter. The rate is fixed by the Ministry of Finance every three months and applies to the five-year RD account.
Quarterly compounding is the key feature that lifts the effective yield above the simple 6.7% headline. Interest is added to the balance every quarter and itself earns interest, so the longer the account runs, the more the compounding works in the saver's favour.
"The government has kept the Post Office RD interest rate unchanged at 6.7% for the April-June quarter, compounded quarterly across the fixed five-year term." (Upstox, Post Office Recurring Deposit rate report, April 2026.)
How much you need to deposit
A Post Office RD account can be opened with a minimum of ₹100 a month, with further deposits in multiples of ₹10 and no maximum limit. The monthly instalment is fixed at the time of opening and must be paid every month for the full five-year term.
Deposits made before the 15th of the month count for that month; an account opened with the first deposit between the 1st and 15th must continue paying by the 15th each month thereafter. Missed instalments attract a small default fee of ₹1 for every ₹100 of monthly deposit.
| Feature | Post Office RD rule (2026) |
|---|---|
| Interest rate | 6.7% per annum, compounded quarterly |
| Minimum deposit | ₹100 per month, then multiples of ₹10 |
| Maximum deposit | No upper limit |
| Tenure | 5 years (60 months) |
| Premature closure | Allowed after 3 years |
| Loan facility | Up to 50% of balance after 12 instalments |
| Extension | Renewable for a further 5 years |
| Section 80C benefit | No |
How RD maturity is calculated
Each monthly instalment earns interest from the month it is paid until maturity, with the interest compounded quarterly. Because earlier instalments have longer to grow, the early deposits contribute more interest than the later ones, which is why an RD held to full term returns noticeably more than the simple sum deposited.
The Post Office publishes a maturity figure per ₹100 of monthly deposit, so a saver can scale it to their chosen instalment. The result is a known maturity amount the saver can plan toward from the day the account opens.
What a Post Office RD can build in five years
A ₹5,000 monthly deposit at 6.7% grows to roughly ₹3.56 lakh after five years, against ₹3 lakh deposited - about ₹56,000 of guaranteed interest. The maturity value scales directly with the monthly instalment, so the maths is easy to project before opening the account.
| Monthly deposit | Total deposited (5 yrs) | Approx. maturity at 6.7% |
|---|---|---|
| ₹1,000 | ₹60,000 | ~₹71,200 |
| ₹2,500 | ₹1,50,000 | ~₹1,78,000 |
| ₹5,000 | ₹3,00,000 | ~₹3,56,000 |
| ₹10,000 | ₹6,00,000 | ~₹7,12,000 |
These figures assume every instalment is paid on time and the 6.7% rate holds for the full term. Because rates reset quarterly, the actual maturity value moves with any future revision, though the rate at opening applies to deposits already made.
Missed instalments and reviving the account
If a monthly instalment is missed, a default fee of ₹1 for every ₹100 of deposit is charged for each lapsed month, and the account is regularised by paying the arrears together with the fee. The scheme allows a limited number of defaults before the account is affected.
If too many instalments are missed, the account can be discontinued, after which it must be revived within a specified period by clearing the arrears, or it cannot continue. Keeping the instalments current, ideally by a standing instruction, is the simplest way to avoid this.
Loans and premature closure
A Post Office RD allows a loan of up to 50% of the credit balance once 12 monthly instalments have been paid and the account has run for a year. The loan carries interest at 2% above the RD rate and can be repaid in one go or in instalments, making the RD a quiet source of emergency liquidity.
Premature closure is permitted only after the account has completed three years, and the deposit then earns interest at the Post Office Savings Account rate of 4% rather than the full RD rate. Closing early therefore sacrifices a meaningful part of the return, so the RD rewards savers who hold to the full five years.
"The Post Office Recurring Deposit can be closed prematurely only after three years from the date of account opening, and the scheme allows loans up to 50% of the deposits." (Policybazaar, Post Office RD Interest Rate 2026.)
Extending the RD after five years
At the end of the five-year term, the RD can be continued for a further five years, with or without fresh deposits, keeping the balance earning the RD rate. This lets a saver who wants to keep building avoid opening a new account.
Alternatively, the matured amount can be taken and redeployed, for instance into a Time Deposit or another scheme. Planning around the maturity date ensures the corpus keeps working rather than sitting idle.
Post Office RD versus bank recurring deposits
The Post Office RD's main edge over a bank RD is its sovereign guarantee, which covers the full amount rather than the ₹5 lakh deposit-insurance cap that applies to banks. Its 6.7% rate is competitive with, and often higher than, the RD rates offered by large public-sector banks in 2026.
Bank RDs, by contrast, offer more flexible tenures - from six months to ten years - against the Post Office RD's fixed five-year term. A saver who wants a shorter commitment may prefer a bank RD; one who wants the highest guaranteed safety usually prefers the Post Office.
Who the Post Office RD suits
The RD fits a salaried or regular-income saver who wants to build a corpus from monthly cash flow without market risk. It is especially useful for short-to-medium goals five years out - a down payment, a wedding fund, or a child's school fees - where capital protection matters more than maximising yield.
Using the RD for goal-based saving
Because the maturity amount is known in advance, the RD is a natural tool for a specific, dated goal: a saver works out the monthly instalment needed to reach a target sum in five years and sets it as the instalment. This turns a vague intention to save into a concrete, automated plan.
Running more than one RD for different goals is also possible, since there is no upper limit, letting a household earmark separate accounts for separate purposes. The discipline of a fixed monthly commitment is what makes the RD so effective at reaching a goal.
How to open a Post Office RD account
An RD account can be opened at any post office with an Aadhaar, PAN, a passport-size photograph and the first monthly deposit. Existing India Post savings customers can also open and fund an RD digitally through Department of Posts internet banking or the IPPB mobile app, as set out in IndiaPost's guide to how to open a Post Office savings scheme.
Accounts can be held singly, jointly by up to three adults, or by a guardian for a minor, and a minor above 10 can operate the account independently. The account is freely transferable between post offices anywhere in the country.
Nomination and joint accounts
A nominee should be recorded when the account is opened, so the balance passes directly to them on the holder's death without a difficult claim. The nomination can be updated later as circumstances change.
A joint RD, held by up to three adults, can be operated by the holders together or by the survivors, depending on the mode chosen at opening. For a couple or family saving toward a shared goal, a joint RD keeps the contribution and the eventual payout in agreed hands.
Why quarterly compounding matters
The Post Office RD's quarterly compounding is what separates its return from a simple-interest calculation: interest credited each quarter joins the balance and earns further interest. Over five years and sixty instalments, this compounding adds a meaningful amount on top of the deposits, more than a yearly-compounded account would.
For a saver, the practical takeaway is that holding to the full term lets the compounding do its work, while exiting early both forfeits the rate and cuts the compounding short. Patience is rewarded directly in the maturity figure, which is why the RD suits a committed five-year goal.
The RD as a stepping stone
For many savers, the RD is the first scheme they hold, building both a corpus and the habit of regular saving. Once the discipline is established and a lump sum has formed, the matured RD can feed into longer or higher-yielding schemes like a Time Deposit, NSC or PPF.
In this sense the RD is a stepping stone as much as a destination, turning monthly income into the capital that later schemes need. It is very often the place where a household's whole savings journey first begins.
Methodology
The interest rate cited is the official figure notified by the Ministry of Finance for the first quarter of FY 2026-27 (1 April to 30 June 2026), cross-checked against India Post documentation and independent trackers including Upstox and Policybazaar. Maturity values are simplified projections assuming on-time monthly deposits and a constant 6.7% rate; actual returns vary with future quarterly revisions. RD rules on loans, closure and deposits reflect the scheme provisions in force at the time of writing.
Key takeaways
- The Post Office RD rate is 6.7% for April-June 2026, compounded quarterly over a five-year term.
- Deposits start at ₹100 a month in multiples of ₹10, with no maximum limit.
- A ₹5,000 monthly deposit grows to roughly ₹3.56 lakh in five years, including about ₹56,000 interest.
- A loan of up to 50% of the balance is available after 12 instalments at 2% above the RD rate.
- Premature closure is allowed only after three years and drops the return to the 4% savings rate.
- Missed instalments carry a small fee; the account can be extended for a further five years.
- RD interest is taxable and earns no Section 80C deduction, but the deposit carries a full sovereign guarantee.
Looking ahead
With small savings rates held steady for two years, the July-September 2026 review is the first realistic window for a change to the RD rate. Whatever the next revision brings, the Post Office RD's core appeal is unchanged: it converts the hardest part of saving - doing it every month - into a guaranteed, government-backed corpus, which is why it remains one of the most widely held accounts in the country.