Features

Returns

Amount repayable for an account of Rs. 10 denomination Rs. 728.90 after 5 years.

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 is more than one year old. The interest rate applicable will be that which is prevailing at that time.

Maturity

The certificate is to be discharged at the back.

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 can be availed under section 80L. No Tax benefits are provided under section 88.

Tips for Investing

• A P. O. Recurring Deposit is a novel way of saving a fixed sum every month for a particular period which will fetch the investor a large sum after 5 years.

Terms

Mode of Operation

• Single
• Jointly
• Minor with a Guardian

Tenure

A Recurring Deposit can be opened for a period of 5 years and can further be renewed for 5 years from the date of maturity of the previous term.

Payment Installments

The deposit is to made by 60 installments into the account. The first installment shall be made at the time of opening the account and the amount of all such deposit shall be fixed. Each subsequent monthly installment shall be made before the end of the calendar month and shall be equal to the first deposit. Where a deposit is made by means of a cheque, pay order or demand draft, the date of its presentation to the Post Office Savings Bank shall be deemed to be the date of deposit.

Default installment

If there are less than five defaults in monthly installments, 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 installment during the extended period. If there are more than the five defaults, the account shall be treated as discontinued. Revival of the account shall be permitted only within a period of six months from the month of sixth default. Interest at the rate of the ten paise for every five rupees of a defaulted installment for each month of default shall also be paid alongwith such deposit and an account in which defaulted installments are so deposited, shall not be treated as discontinued.

Repayment

In the case of an account in which all monthly deposits have been made during its maturity period or maturity period as extended, the depositor shall get back the entire amount with interest. Where an account has discontinued or where the defaults in monthly deposit in an account have not been rectified during its maturity period or maturity period as extended, the depositor shall be entitled, on the expiry of such period, to receive an amount, inclusive of interest, which shall be in the same proportion to the amount specified in the schedule, as the number of monthly deposits made in the account bears to sixty.

Prepayment

The depositor of an account may prematurely close the account after one year from the date of opening of the account provided that interest at the rate applicable then to the post office savings account shall be payable on such premature closure of an account.

Withdrawal

Where an account is still in current, withdrawal is allowed if the account has accumulated fifty per cent of the deposits after the account has been in operation for at least one year and twelve monthly deposits have been made in the account. In the case of repayment in one lump sum, interest at the rate specified shall be calculated on the amount of withdrawal for the full calendar months from the month of withdrawal to the month of repayment. Where, for any reason, the amount of withdrawal or a part thereof has not been re-paid, or the interest thereon has not been paid, by the depositor before the closure of the account, the outstanding amount due from him in the account shall be recovered from the amount payable to him or to his nominee or legal heir, as the case may be, on the closure of the account.

Passbook

A passbook is issued for a Recurring Deposits at the time of opening the account. The passbook can be updated every month at the time of paying the installments.