Post Office RD: You can also take loan against Post Office RD, know what are its rules?
Post Office RD: Like FD, RD is also considered a better means of investment. In FD you have to deposit a lump sum amount, whereas in RD you have to pay a fixed amount monthly for a fixed period, on maturity you get the RD money with interest.
You get the facility of RD. Recurring Deposit Account-RD Scheme in both Post Office and Bank. In the bank you can start it for 1, 2, 3 or 5 years, but if you start the RD scheme in the post office then you will have to deposit the amount continuously for 5 years.
However, you get pretty good interest in Post Office RD. At present interest is being given at the rate of 6.5 percent. Apart from this, one of its advantages is that in difficult times, you can withdraw some amount from the money deposited in RD as a loan. However, people are not aware about the loan facility on RD. Let us tell you about it.
Loan Rules on Post Office RD
If you deposit 12 consecutive installments in the five-year general deposit scheme of the post office, then you get the loan facility. That means, to avail this facility, you will have to deposit the amount continuously for at least one year. After one year, you can take a loan up to 50 percent of the amount deposited in your account. You can repay the loan amount in lump sum or in equal monthly installments.
How much interest will have to be paid?
Interest on the loan amount will be applicable at 2% + RD interest rate applicable on RD account. Interest will be calculated from the date of withdrawal to the date of repayment. If you do not repay the loan on time after taking it, then when the RD matures, the loan amount along with interest will be deducted from it. To avail the facility of loan against RD, you will have to fill the application form along with the passbook and submit it to the post office.
Benefits of Post Office RD
Post Office RD can be opened with Rs 100, an amount that anyone can easily save. There is no maximum limit on investment in this.
You get the benefit of compound interest on Post Office RD. Interest is calculated every quarter. In such a situation, you get good profit in the form of interest in 5 years.
A person can open any number of accounts in the Post Office Recurring Deposit Scheme. In this, apart from single account, joint account can be opened for three people. There is a facility to open an account in the name of the child also.
The maturity period of RD account is 5 years. But, pre-mature closure can be done after 3 years. There is also a facility for nomination. At the same time, after maturity, RD account can be continued for further 5 years.
