Post Office RD Vs Bank RD

Check Your Credit Score Now

Bank Recurring Deposit Features 

The various features of Bank recurring deposit are mentioned below  

1. The minimum and maximum deposit periods are six months and 10 years, respectively 
2. It is possible to transfer RD from one bank to another 
3. A loan against the deposit, or utilizing the deposit as security, is another option offered by RD. The account holder is eligible for a loan between 80 and 90 percent of the deposit value. Depending on the lender, it varies 
4. The interest rate is larger than that of any other savings plan because it is the same as that provided on a fixed deposit 
   

Check Your Credit Score Now

Post Office Recurring Deposit 

The Post Office Savings Scheme is one of nine government-backed savings plans that the post office offers. The recurring deposit offered by the Post Office serves as a mid-term savings strategy. Investors in this plan must hold their investments for a minimum of five years. 

Check Your Credit Score Now

Post Office Recurring Deposit Features 

The various features of Post Office recurring deposit are mentioned below 

1. Small investors are helped by Post Office Account RD, which enables them to put as little as Rs.100 per month and in multiples of Rs.10 into an account. There is no cap on how much can be invested 

1. The Post Office RD is a five-year, fixed-monthly investment 
2. The account permits a partial withdrawal of up to 50% of the value after a year 
3. Additionally, joint accounts can be created by two adults. It is also possible to open an account in a minor's name. Accounts can be made in bulk 

Check Your Credit Score Now

Post Office Recurring Deposit Vs Bank Recurring Deposit 

A comparison between Post Office recurring deposit and Bank recurring deposit are mentioned below 

1. Bank RD interest rates are not routinely updated, unlike post office RD interest rates, which are reviewed every quarter. 
2. In contrast to banks, which offer a variety of tenure options ranging from one year to ten years, the post office limits the term of an RD account to five years. 
3. 50% of a post office RD's remaining balance may be withdrawn in the event of an early withdrawal. During the period of the account, this advance may be repaid in full at any time, plus interest at the specified rate. Up to 95% of the recurring deposit amount may be borrowed or overdrawn in a bank RD. 
4. In banks, the RD can be renewed indefinitely, but at the post office, the term must be five years. 

A good credit score can help you secure lower interest rates on loans and credit cards.

Get Free Credit Score

FAQs on Post Office RD Vs Bank RD

• What are the tenure options available in RD and Post Office Savings Schemes?

  The tenure options for Recurring Deposit Schemes typically range from 6 months to 10 years, varying across different banks. Post Office Savings Schemes offer various options such as Monthly Income Schemes, Time Deposit Accounts, and others, each with its own specific tenure and features. 

• Can I avail of tax benefits through RD and Post Office Savings Schemes?

  Both RD and certain Post Office Savings Schemes offer tax benefits under Section 80C of the Income Tax Act, allowing investors to claim deductions on the invested amount up to a certain limit. However, the tax treatment may vary depending on the specific scheme and the investor's tax status. 

• Are premature withdrawals permitted in RD and Post Office Savings Schemes?

  Most banks allow premature withdrawals from Recurring Deposit Schemes, subject to certain conditions and penalties. Similarly, Post Office Savings Schemes may permit premature withdrawals under specific circumstances, but this can vary depending on the scheme and the duration of the investment. 

• Which is more accessible, RD or Post Office Savings Schemes?

  Accessibility may vary based on individual preferences and geographical factors. While Recurring Deposit Schemes are primarily offered by banks and can be accessed through their branches or online platforms, Post Office Savings Schemes are accessible through India Post's extensive network of post offices across the country. 

• Are there any differences in terms of security between RD and Post Office Savings Schemes?

  Both RD and Post Office Savings Schemes are considered safe investment options. RD schemes offered by banks are covered under deposit insurance schemes like DICGC (Deposit Insurance and Credit Guarantee Corporation), while Post Office Savings Schemes are backed by the Government of India, providing a high level of security. 

• Can I transfer my RD account to a Post Office Savings Scheme or vice versa?

  No, RD accounts cannot be directly transferred to Post Office Savings Schemes or vice versa. However, investors can choose to close their existing accounts and open new ones in the desired scheme, subject to the respective terms and conditions of the providers. 

• Which is better suited for long-term savings, RD or Post Office Savings Schemes?

  Both RD and Post Office Savings Schemes can be suitable for long-term savings depending on individual financial goals, risk tolerance, and liquidity requirements. Investors may choose between them based on factors such as interest rates, tenure flexibility, and convenience of access. 

• How can I decide between RD and Post Office Savings Schemes for my savings needs?

  The decision between RD and Post Office Savings Schemes should be based on factors such as interest rates, tenure options, tax benefits, accessibility, and overall suitability to individual financial goals and preferences. It is advisable to compare each scheme's features and consult a financial advisor if needed before deciding.