Post office national savings RD account premature withdrawal rules explained
RD accounts can be closed prematurely after completion of three years from the date of account opening by submitting a prescribed application form at the concerned post office.
According to the National Savings Recurring Deposit Account Rules 2019 , “The account holder may, by making an application to the accounts office in Form-2, close the account prematurely after three years from the date of opening of the account and interest at the rate applicable from time to time to the Post Office Savings Account shall be payable on such premature closure of account: Provided that no premature closure of account shall be permissible until the period for which the advance deposits have been made is over.”
This means that you cannot prematurely close the RD account until the period for which advance deposits have been made is over.
As per the National Savings Recurring Deposit Account Rules 2019, the advance deposit payments can only be made in a post office RD account that has not been classified as ‘discontinued’.
“In an account which has not become a discontinued account, deposits for not less than six monthly instalments may be made in advance in any month at the option of the account holder. If advance deposits are made for a period less than six months, no rebate shall be allowed and if the advance deposits are made for a period less than twelve months, the rebate shall be allowed to the extent admissible for six monthly advance deposits only,” as per the rules cited above.Hence if you are making any advance deposit, then do remember to wait for the advance deposit’s time to run out. Until this happens you cannot prematurely withdraw from the RD.According to the India Post website as of June 22, 2024, “Post savings account interest rate will be applicable if the account is closed prematurely even if it’s one day before maturity.”
When do post office national savings RDs mature?
According to the India Post website as of June 22, 2024, here are the maturity rules of the post office RD account:
- Five years (60 monthly deposits) from the date of opening,
- The account can be extended for a further five years by giving an application at the concerned post office. The interest rate applicable during the extension will be the interest rate at which the account was originally opened.
- Extended accounts can be closed at any time during the period of extension. For completed years, the RD interest rate will be applicable and for periods less than a year, the post office savings account interest rate will be applicable.
- RD accounts can be retained up to five years from the date of maturity without deposit.
