Post Office RD Premature Closure Calculator

Calculate your Recurring Deposit premature closure amount with current 2025 interest rates

🧮 RD Premature Calculator

📊 Calculation Results

Total Deposits Made: ₹0
Interest Earned: ₹0
Penalty (If any): ₹0
Premature Closure Amount: ₹0

📋 Key Information

  • Current Interest Rate: 6.7% per annum (quarterly compounded) from Jan 1, 2025
  • Minimum Deposit: ₹100 per month or multiples of ₹10
  • Premature Closure: Allowed after 3 years from opening date
  • Interest on Premature Closure: Post Office Savings Account rate applies
  • Maturity Period: 5 years (60 monthly deposits)
Important: Premature closure results in lower returns as savings account interest rate applies instead of RD rate.

Complete Guide to Post Office RD Premature Closure

What is Post Office Recurring Deposit (RD)?

Post Office Recurring Deposit is a popular investment scheme offered by India Post that allows investors to deposit a fixed amount every month for a period of 5 years. With the current interest rate of 6.7% per annum (effective from January 1, 2025), it provides a safe and guaranteed return on investment.

When Can You Close RD Prematurely?

According to Post Office rules, you can close your RD account prematurely only after completing 3 years from the date of account opening. Any attempt to close before 3 years is not permitted under the scheme guidelines.

Key Rule: Premature closure is allowed only after 3 years from the account opening date, not before.

Interest Rate on Premature Closure

When you close your RD account before maturity (5 years), you don’t get the full RD interest rate of 6.7%. Instead, the Post Office Savings Account interest rate is applied to your deposits. Currently, the Post Office Savings Account interest rate is 4% per annum.

How to Calculate Premature Closure Amount

The calculation involves several steps:

  • Calculate total number of completed months
  • Apply Post Office Savings Account interest rate (4% p.a.) instead of RD rate
  • Compute compound interest on monthly deposits
  • Add principal amount to interest earned

Documents Required for Premature Closure

To close your RD account prematurely, you need to submit:

  • Prescribed application form for premature closure
  • Original RD passbook
  • Identity proof (Aadhaar, PAN, etc.)
  • Address proof

Advantages of Post Office RD

  • Safe Investment: Government-backed scheme with guaranteed returns
  • Tax Benefits: Eligible for tax deduction under Section 80C
  • Flexible Deposits: Minimum ₹100 per month, maximum no limit
  • Loan Facility: Available after 1 year (up to 50% of balance)
  • Nomination Facility: Protects your investment

Current Interest Rates

As per the latest notification from Department of Posts, the current interest rates are:

  • RD Interest Rate: 6.7% per annum (quarterly compounded)
  • Savings Account Rate: 4.0% per annum (applied on premature closure)
Tip: Consider the impact of premature closure on your returns. Sometimes it’s better to continue the RD till maturity or take a loan against it instead of closing prematurely.

Frequently Asked Questions

Q: Can I close my RD before 3 years?

No, premature closure is not allowed before completing 3 years from the account opening date.

Q: What happens to the interest if I close prematurely?

Instead of the RD interest rate (6.7%), you’ll receive interest at the Post Office Savings Account rate (4%).

Q: Is there any penalty for premature closure?

While there’s no separate penalty fee, the reduced interest rate itself acts as a penalty for early closure.

Q: Can I take a loan instead of closing prematurely?

Yes, after 1 year and 12 deposits, you can avail a loan up to 50% of your account balance at RD rate + 2%.