Post office recurring deposit

Post office recurring deposit (PORD) account is a systematic way of saving money.

Post office recurring deposit (PORD) account is a systematic way of saving money. The scheme is meant for those investors who want to deposit a fixed amount regularly on monthly basis so as to build a corpus at the time of maturity.

Minimum invested amount has to be Rs 1,500. Maximum amount is Rs 4.50 lakhs for single account and Rs 9 lakhs for joint account. Minors have a separate limit of investment of Rs 3 lakhs and the same is not clubbed with the limit of guardian.

The maturity period is 6 years and the interest rate is 8 per cent payable monthly. 5 per cent is given as a bonus on maturity. It is a good way of regularly saving some money on a monthly basis. However,along with it one must explore other options as well which may provide better returns in the long term.

Story continues below this ad

Post office recurring deposit is a six year account and the account can be transferred to any post office anywhere in India. Premature encashment facility is available after one year. Premature closure of account after 1 year to 3 years penalty of 2 per cent of the deposit amount will be deducted and the balance is paid off. Similarly,deduction of 1 per cent of the deposit amount if account is closed prematurely at any time after three years

Interest received will be taken into account for income tax purposes,but no TDS will be deductible. Deposits are exempt from Wealth tax. There is a facility of reinvestment on maturity of an account.

For your personal finance queries/feedback mail us atexpressmoneyexpressindia.com