Current RD rates
| Scheme | Rate | Tenure |
|---|---|---|
| Post Office 5-year RD (India Post) | 6.7% a year, compounded quarterly | 60 months (can be extended 5 more years) |
| Bank RDs (SBI, HDFC, ICICI and others) | Set by each bank — check its rate card | 6 months to 10 years |
| Senior citizens at banks | Usually 0.25%–0.75% extra | Same |
The Ministry of Finance kept all small savings rates unchanged for October–December 2026 (announced 30 September 2026), so the Post Office RD stays at 6.7%.
How the maturity value is calculated
Each monthly instalment earns interest compounded every quarter for the months it stays in the account. In formula form: maturity = Σ P × (1 + r/400)k/3 for k = 1 … n, where P is the monthly deposit, r the annual rate and n the number of months. This is the standard method used by banks and India Post: ₹10,000 a month for 60 months at 6.7% comes to about ₹7,13,658.
Tax and TDS
RD interest is taxable at your slab rate every year, whether or not you receive it. Banks deduct 10% TDS once your interest from that bank passes ₹50,000 in a financial year (₹1,00,000 for senior citizens). If your total income is below the taxable limit you can submit Form 15G (or 15H if 60+) to avoid TDS.
Default example
₹5,000 a month for 60 months at 6.7%: you deposit ₹3,00,000 and get back ₹3,56,829, so the interest is ₹56,829.
FAQ
What is the Post Office RD interest rate now?
6.7% a year, compounded quarterly, for October–December 2026 (unchanged).
What will ₹5,000 a month in a Post Office RD give after 5 years?
₹3,56,829. You deposit ₹3,00,000 and earn ₹56,829 interest.
How is RD interest calculated?
Each instalment earns interest compounded quarterly for the time it stays in the account: maturity = Σ P × (1 + r/400)^(k/3).
Is TDS deducted on RD interest?
Yes, at 10% if your interest from one bank exceeds ₹50,000 in a financial year (₹1,00,000 for senior citizens), unless you submit Form 15G/15H.
Sources (checked 5 November 2026): Ministry of Finance (Department of Economic Affairs) small savings rates for Q3 FY 2026-27, announced 30 September 2026 (5-year RD 6.7%, reported by Studycafe and Free Press Journal); India Post Recurring Deposit Account rules (quarterly compounding, default fee, loan and premature closure); Income-tax Act TDS thresholds for interest (₹50,000 / ₹1,00,000 for senior citizens from 1 April 2025).