Kolkata: Of all the investment instruments that are available in the post office, post office term deposit, post office monthly income scheme and National Savings Certificate (NSC) are very popular. Competing with these instruments in popularity is the post office recurring deposit (RD). The RD interest rate in post office is 6.7% now.
The big advantage of RD is that even if one doesn’t have a sizeable amount in his/her pocket to invest in NSC or term deposit, one can easily open an RD account. It allows one to invest in a disciplined manner over a few years, enjoy a considerable rate of interest and with the highest possible safety of capital. However, there are a few mistakes that can lead to the closure of the post office RD and an individual has to be very careful so as to not commit these mistakes.
Defaulting in RD payments
The minimum amount that one has to pay every month in an RD is Rs 100 and there is no upper limit. Despite the latitude offered in terms of a wide range, whoever opens an RD account must remember that one has to pay the predetermined amount without fail, month after month.
If a depositor does not make a deposit on the prescribed day for a month, it is considered a default and a default fee though charged for each defaulted month. The amount of default fee is Re 1 for every Rs 100 rupee. Therefore if one invests Rs 1,000 per month, the default for a month will be Rs 10.
When is an RD discontinued permanently
In case of a default in an RD account, the depositor has to first pay the defaulted monthly deposit with default fee. Then only can he/she pay the deposit for that month. The most important point to remember is that if one makes four defaults, the account is regarded as discontinued. A discontinued account can be revived within two months from the fourth default. If any depositor neglects even this two-month period and does not revive he account within 60 days, the account is permanently discontinued. No deposit can be made in such an account.
The post office recurring deposit is an extremely useful investment instrument for those who do not have a lump sum to invest in fixed deposits. Therefore, one must guard against these mistakes which can lead to the closure of the account. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
