A post office RD is one of the few savings instruments in India where the government sets the rate and it applies the same way to every single depositor, whether you're 22 or 82, whether you put in ₹100 a month or ₹50,000. That's rare. Bank RDs slice their rates by tenure, by customer age, sometimes even by which branch you walk into. Before you commit five years of monthly deposits to either, it helps to see the actual numbers side by side rather than the marketing copy.
This guide walks through how a post office RD works, what it currently pays, how it stacks up against a bank RD, and where Kisan Vikas Patra fits if you're comparing government-backed options. If you want to skip straight to the numbers for your own deposit amount, our RD calculator will do the maturity math for any tenure and amount.
Post Office RD Scheme: How It Differs From Bank RDs
A Recurring Deposit, or RD, is a savings product where you deposit a fixed sum every month for a set period and collect the principal plus interest at the end. A post office RD calculator works the same way any RD calculator does: you enter the monthly amount, the rate, and the tenure, and it tells you what you'll have at maturity. The post office version, however, runs on rules set directly by the Ministry of Finance under the National Savings Recurring Deposit scheme, not by an individual bank's treasury desk.
The practical differences show up quickly. A post office RD has a fixed five-year tenure. You can't open one for six months or two years the way you can at most banks. The minimum deposit is ₹100 a month, in multiples of ₹10 after that, with no upper limit. And crucially, the interest rate is uniform. There's no senior citizen bump, no relationship-manager special, no online-only discount. Everyone opening an account in the same quarter gets the same rate, and that rate stays fixed for the full five years regardless of what happens to rates afterward.
Banks, by contrast, treat RD tenure as a dial they can turn. A bank might offer 6.25% for a one-year RD and 7% for a three-year one, with an extra 0.25% to 0.5% if you're a senior citizen. That flexibility can work in your favour if you shop around, but it also means the number you see advertised isn't necessarily the number you'll get, since it depends on tenure, customer category, and sometimes the specific branch.
There's also a practical account-opening difference. A post office RD account can be opened at any India Post branch, or online through India Post's internet banking if you already hold a post office savings account, using standard KYC documents like PAN, Aadhaar, or a voter ID. There's no requirement to already bank with a private or public sector bank, which matters in smaller towns where post offices remain more accessible than bank branches.
None of this makes the post office RD automatically better. It just means the comparison isn't really "which pays more" so much as "which structure fits how you save." If you want a fixed rate you don't have to negotiate or research every year, the post office version is simpler. If you want to shop for the best tenure-specific rate and don't mind checking a few bank websites, an RD calculator can help you weigh both before you commit.
Current Post Office RD Interest Rate
As of the July to September 2026 quarter, the post office recurring deposit interest rate is 6.7% per annum, compounded quarterly. This rate has stayed unchanged for several consecutive quarters, which is typical for this scheme; the government tends to move it in small steps, not sudden jumps.
Here's the part people miss: the government revises small savings rates every quarter, but that revision only affects new accounts opened after the change. If you open your RD today at 6.7%, you keep 6.7% for the entire five-year tenure even if next quarter's rate moves up or down. The rate at the moment you sign the account opening form is the rate that governs your maturity value. This is worth remembering if you're debating whether to open an account now or wait for a possible rate hike; waiting only helps if the new rate applies before your money would otherwise start earning interest.
Quarterly compounding means the interest earned in each three-month block gets added to your balance, and the next quarter's interest is calculated on that larger amount. Over five years this compounding effect adds up to noticeably more than simple interest would, which is one reason the post office RD calculator math looks a bit more involved than a plain "amount times rate times time" sum.
To put the current rate into real numbers, here's what a five-year post office RD actually returns at 6.7% for three common monthly deposit amounts:
| Monthly Deposit | Total Invested (5 yrs) | Interest Earned | Maturity Value |
|---|---|---|---|
| ₹1,000 | ₹60,000 | ₹11,366 | ₹71,366 |
| ₹3,000 | ₹1,80,000 | ₹34,097 | ₹2,14,097 |
| ₹5,000 | ₹3,00,000 | ₹56,829 | ₹3,56,829 |
Notice that the interest earned isn't a flat percentage of what you put in. Depositing five times as much (₹5,000 versus ₹1,000) earns roughly five times the interest too, since the underlying math scales linearly with the deposit amount. What doesn't scale linearly is tenure: stretch the same monthly deposit over a longer period and the compounding effect grows faster than the extra months alone would suggest. You can check this for your own numbers using the RD calculator.
Post Office RD vs Bank RD: Full Comparison
Rates change every quarter for both post office and bank RDs, so any comparison is really a snapshot. Here's how things stand as of mid-2026, and, more usefully, the structural differences that don't change quarter to quarter.
| Feature | Post Office RD | Bank RD |
|---|---|---|
| Current rate range | 6.7% (fixed, one rate) | Roughly 6.25% to 7% for general customers, varies by bank and tenure |
| Senior citizen rate | Same as general (no extra) | Usually 0.25% to 0.5% higher |
| Minimum tenure | 5 years (fixed) | Typically 6 months to 10 years, your choice |
| Minimum deposit | ₹100/month | Varies; commonly ₹100 to ₹1,000/month |
| Premature closure | Allowed after 3 years, at a lower rate | Usually allowed anytime, often with a penalty on the rate |
| Loan against deposit | Up to 50% of balance after 12 instalments | Varies by bank, generally available |
| Backing | Government of India | Deposit Insurance up to ₹5 lakh per bank |
The rate comparison isn't as one-sided as it might look. A post office RD account interest rate of 6.7% sits comfortably inside the range most large banks offer general customers, and it beats some banks' shorter-tenure RDs outright. Where banks pull ahead is for senior citizens, where the extra premium can push a bank RD half a percentage point above the post office rate, and for savers who specifically want a shorter commitment than five years.
The tenure rigidity cuts both ways. If you're confident you won't need the money for five years, the post office RD's fixed tenure isn't a downside, it's just how the product works. If there's a real chance you'll need funds sooner, a bank's flexible one, two, or three-year RD options give you more room to match the deposit to your actual timeline, rather than locking into five years and accepting a rate cut on early withdrawal.
One more practical point: bank RDs let you open an account instantly through net banking if you're already a customer there, while a post office RD, if you don't already hold a post office savings account, typically means a branch visit first. Neither is a dealbreaker, but it's the kind of friction that tips the decision for people who bank almost entirely online.
Kisan Vikas Patra as an Alternative
If the appeal of a post office RD is the government backing rather than the monthly-deposit structure, Kisan Vikas Patra, or KVP, is worth a look. It's a different kind of instrument: you invest a lump sum once, rather than depositing every month, and the scheme is built around a single promise, that your money will exactly double by a fixed date.
The interest rate on KVP currently stands at 7.5% per annum, and at that rate an investment doubles in 115 months, or 9 years and 7 months. That's noticeably higher than the 6.7% post office RD rate, but the trade-off is time and structure. A KVP certificate ties your money up for close to a decade rather than five years, and it works as a one-time investment rather than a disciplined monthly habit. If what you actually want is a place to park a lump sum, say a bonus or a maturity payout from something else, KVP does that job better than an RD would. If you want to build savings gradually from your monthly income, an RD's structure fits that goal more directly.
Minimum investment for KVP is ₹1,000, with no upper limit, and it's available at post offices as well as select authorised banks. The name suggests it's meant for farmers ("Kisan" means farmer in Hindi), but any eligible resident Indian can buy a certificate; there's no occupational restriction in practice.
Where the two schemes are genuinely similar: both are backed by the Government of India, both pay interest that's fully taxable at your income tax slab rate (neither qualifies for Section 80C deduction), and both are best suited to savers who want zero market risk rather than the highest possible return. If you're choosing between the two, the real question isn't "which pays more," it's "do I have a lump sum to invest, or a fixed amount I can set aside every month." That answer usually settles it faster than the rate comparison does.
How to Open and Manage a Post Office RD
Opening a post office RD account is straightforward if you already have a post office savings account: you can do it online through India Post's internet banking portal, transfer the first instalment, and set up auto-debit for subsequent months. Without an existing account, a branch visit is required, along with a filled account-opening form, a passport-size photo, and standard KYC documents such as PAN, Aadhaar, or a voter ID.
Once the account is open, monthly deposits are due within the month; missing one attracts a small default fee, and missing four consecutive instalments can lead to account closure, though it can typically be revived within a set window on payment of the dues. If you deposit in advance, some rebate rules apply for depositing six or twelve months at once, which is worth asking about at the counter if you'd rather not think about it every month.
A loan facility is available against the RD once the account has run for at least a year and twelve instalments have been made, letting you borrow up to 50% of the balance at that point without breaking the deposit. Premature closure is permitted after three years, but you'll earn the lower post office savings account rate for the period the account was open rather than the RD rate you signed up for, so it's not a penalty-free option.
For the actual maturity math, whether you're checking what a specific monthly amount will grow into or comparing a few tenure and deposit scenarios, running the numbers through a dedicated RD calculator is faster and less error-prone than working through the compounding formula by hand. Our broader RD calculator guide covers the underlying formula and bank RD scenarios in more depth if you want that background.
Frequently Asked Questions
Is the post office RD interest rate higher than bank RDs?
Not necessarily. At 6.7%, the post office RD sits within the range most banks offer general customers, roughly 6.25% to 7%. Banks can beat it for senior citizens, who often get an extra 0.25% to 0.5%, since post office RD has no age-based premium. For a general-category depositor choosing a five-year tenure, the two are often close enough that other factors, like tenure flexibility, should decide it.
How often does the government revise post office RD rates?
Quarterly, aligned with the financial year: April to June, July to September, October to December, and January to March. The Ministry of Finance announces the new rate for each quarter shortly before it begins. Importantly, a rate revision only applies to accounts opened after the change; existing RDs keep the rate they were opened at for their full five-year tenure.
What is Kisan Vikas Patra and how does it compare to RD?
Kisan Vikas Patra is a government savings certificate you buy as a one-time lump sum, currently paying 7.5% per annum and doubling your money in 115 months. Unlike an RD, there's no monthly deposit structure, it's built for savers with a single sum to invest rather than a recurring monthly amount. Both are government-backed and fully taxable on the interest earned.
Can NRIs open a post office RD account?
No. Post office RD accounts are restricted to resident Indian citizens; NRIs are not eligible to open one. NRIs looking for a similar low-risk, government-adjacent option typically look at NRE or NRO fixed deposits with banks instead, which are structured specifically for non-resident investors.
In Short
A post office RD gives you a fixed, government-set rate that applies uniformly for a mandatory five-year tenure, which makes it simple to reason about but inflexible if your plans change. A bank RD trades that simplicity for choice, shorter or longer tenures, and a senior citizen premium, at the cost of having to actually compare offers. Kisan Vikas Patra is worth considering if you have a lump sum rather than a monthly amount to invest, and want a higher fixed rate in exchange for a longer, roughly ten-year, holding period.
Whichever route you're leaning toward, run your actual monthly amount and tenure through our RD calculator before opening an account. The maturity value shifts more than most people expect once compounding and tenure both come into play, and it's a five-minute check against a five-year commitment.