National Savings Recurring Deposit Compare

Additional Useful Information

• The minimum amount required to invest in the National Savings Recurring Deposit account is ₹100 per month or in multiple of ₹10.

• There is no maximum limit as to how much an investor can invest in this scheme.

• The maturity period of National Savings Recurring Deposit is 5 years.

• If subsequent deposit is not made up to the prescribed day for a month, a default fee is charged for each defaulted month, fee of ₹1 shall be charged for every ₹100 invested.

• Premature closure of the account is allowed after completion of 3 years.

• An investor can withdraw funds from this account after completion of 1 year up to a limit of 50% of the amount balance in the account.

• National Savings Recurring Deposit is suitable for investors with low appetite for risk and those who wish to save money regularly and receive back a lumpsum at the end of the maturity period.

• Interest earned in this scheme is added and compounded every 3 months (quarterly).

Returns *

• National Savings Recurring Deposit scheme guarantees returns.

• There is only one component of return in this scheme. This is the interest earned on the deposited amount.

• Currently, 6.7% interest per year can be earned in this mode of investment.

Risk Level

• National Savings Recurring Deposit is a very low risk investment option as it is backed by the government of India.

• This means that deposits in a National Savings Recurring Deposit Account are safe and secure since the government can never default.

Liquidity

• National Savings Recurring Deposit is not a very liquid investment option.

• Premature closure of the account is allowed only after completion of 3 years.

• An investor can withdraw funds from this account after completion of 1 year only up to a limit of 50% of the amount balance in the account.

Interesting Facts

• There is an option to make the monthly deposits in advance as well. 

• If the investor defaults on the deposit 4 consecutive times, the account gets discontinued.

Tax Implications

• This scheme is taxable. Taxes are levied based on the interest collected.

• Any interest that investors receive is added to their taxable income and they need to pay tax according to their income slab.

• There is no capital gains tax applicable.

• Investors can also claim a deduction of up to ₹40,000 (₹50000 for senior citizens) under Section 80TTB of the Income Tax. The deduction is available for senior citizens aged 60 years or above.

Where To Invest

• https://www.indiapost.gov.in/Financial/Pages/Content/Post-Office-Saving-Schemes.aspx