Work out Post Office RD maturity, the advance-deposit rebate, and the effect of early closure under the National Savings Recurring Deposit Scheme.
What is special about the Post Office RD compared with a bank RD?
The biggest differences are product rules, not the compounding formula. The term is fixed at 5 years. You can earn a rebate for advance deposits. You can withdraw up to 50% of the balance after one year. And after 3 years you may close it early, but only at the Post Office Savings Account rate.
How does the advance-deposit rebate work?
Under the 2019 scheme, six monthly deposits paid in advance earn ₹10 for each ₹100 of the instalment, and twelve or more earn ₹40, plus ₹10 for any extra block of six.
Can I withdraw money before maturity?
Yes, but only partly after one year. The scheme permits a withdrawal up to 50% of the existing balance. That is not the same as closing the account. Premature closure itself starts only after 3 years.
What happens if I close the account after 3 years?
The RD rate stops. The whole account earns the Post Office Savings Account rate instead, which is why the early-closure figure is so much lower than the maturity amount.
Can I keep the account after 5 years?
Yes, for another five years, with or without fresh deposits. This page prices the ordinary 5-year maturity.