The answer
Deposit ₹5,000 every month for 60 months and you put in ₹3,00,000. At 6.7% compounded quarterly, India Post pays back ₹3,56,829 — that is ₹56,829 of interest.
Other monthly amounts (60 months at 6.7%)
| Monthly | Deposited | Maturity | Interest |
|---|---|---|---|
| ₹500 | ₹30,000 | ₹35,683 | ₹5,683 |
| ₹1,000 | ₹60,000 | ₹71,366 | ₹11,366 |
| ₹2,000 | ₹1,20,000 | ₹1,42,732 | ₹22,732 |
| ₹3,000 | ₹1,80,000 | ₹2,14,097 | ₹34,097 |
| ₹5,000 | ₹3,00,000 | ₹3,56,829 | ₹56,829 |
| ₹10,000 | ₹6,00,000 | ₹7,13,658 | ₹1,13,658 |
Good to know about the Post Office RD
- Minimum ₹100 a month, then any multiple of ₹10. No maximum.
- Rate locked: the rate when you open the account applies for the full 5 years, even if rates change later.
- Missed instalment: a small default fee of ₹1 per ₹100 per month is charged; after 4 missed instalments in a row the account is discontinued (it can be revived within 2 months).
- Loan: after 12 instalments you can borrow up to 50% of the balance.
- Premature closure after 3 years is allowed, but you get the Post Office savings account rate (4%) instead of 6.7%.
- Extension: at maturity you can continue for another 5 years at the rate applicable when the account was opened.
Is it worth it?
The RD is safe and disciplined, but interest is fully taxable. If you are in the 20% or 30% slab, the after-tax return is closer to 5.4% or 4.7%. For long-term goals PPF (7.1%, tax-free) usually wins; for a 1–5 year goal where you cannot take risk, an RD is a comfortable choice.
How to open one
You can open a Post Office RD at any post office with Aadhaar, PAN, a photograph and the first deposit, or online through India Post Payments Bank if you already have a Post Office savings account. Accounts can be single, joint (up to three adults) or opened by a guardian for a minor. Paying six or more instalments in advance earns a small rebate.
Deposits are due by the 15th of the month if the account was opened between the 1st and 15th, or by the last working day if opened after the 15th. Setting a standing instruction from your Post Office savings account avoids missing a month and paying the default fee. At maturity, the money goes to your linked savings account or can be withdrawn at the counter.
Key RD figures (checked 5 November 2026)
| Item | Figure |
|---|---|
| Post Office 5-year RD rate (Oct–Dec 2026) | 6.7%, compounded quarterly |
| Minimum deposit | ₹100 a month (Post Office) |
| TDS threshold per bank | ₹50,000 interest a year (₹1,00,000 seniors) |
| TDS rate | 10% with PAN, 20% without |
| Compounding formula | Σ P × (1 + r/400)^(k/3) |
FAQ
What is the maturity amount of ₹5,000 per month in a Post Office RD?
₹3,56,829 after 60 months at 6.7%.
How much interest do I earn on ₹5,000 a month for 5 years?
₹56,829 on ₹3,00,000 deposited.
What does ₹1,000 a month give in a Post Office RD?
₹71,366 after 5 years.
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).