Things to know about Post Office Recurring Deposit

The Post Office Recurring Deposit (PORD) is a systematic savings plan, where you save small but finite equal sums of money each month for a period of 60 months. The savings in the post office recurring deposit earn fixed interest, which can be used to accumulate sizeable and predetermined savings over time. Features of Post Office Recurring Deposit Eligibility: You need to be a resident Indian preferably with a post office savings account. Entry age: No age limit is mentioned. Minors above 10 years can open an account in their name directly. Investments: Minimum-Rs 100 and above in multiples of Rs 10 thereof. Maximum-There is no upper limit. Tenure: 60 months (5 years). Account-holding categories: Individual, Joint, Minor through the guardian, and Minor above 10 years. Nomination: Facility is available. Exit option: Premature closing of the account is permitted with a penalty. Investment objective and risks The main objective of the post office recurring deposit is to provide an assured return, compounded quarterly, on every monthly deposit made over 60 months. Though it offers no tax incentives, it is a preferred instrument amongst small savers because of the government backing that it offers. There is no risk associated with this investment. Suitability and alternatives Suitable for conservative investors seeking assured returns by investing regularly for medium-term goals up to five year

This article was originally published on January 24, 2022, and last updated on August 25, 2022.