Post Office Recurring Deposit at 6.7% since October 2023: 4 things monthly savers should know before September 30 review

The Post Office Recurring Deposit (RD) is one of the last schemes that the government revised in 2023. The scheme's rate was raised 20 basis points to 6.7% with effect from October 1, 2023. Only Sukanya Samriddhi and the three-year time deposit have been revised since, with effect from January 2024. If September 30 notification for the October-December 2026 quarter leaves the RD untouched, it would be the 13th consecutive quarter at 6.7%.

The post office RD accepts monthly instalments of ₹100 or more for 60 months, with interest compounded quarterly.

There is no tax benefit under this scheme. Premature closure is allowed once the account has run for three years. A loan of up to half the balance is also available under this scheme after 12 instalments.

2)What the formula suggests

As per the Shyamala Gopinath Committee framework, the RD is measured against the 5-year G-sec. In the July-September reference quarter, that G-sec averaged roughly 6.5%. With the usual 25-basis-point spread, the implied rate is about 6.75%, while the current rate is 6.7%. This makes the RD one of the fairest-priced schemes in the small savings basket. If the formula were applied mechanically, the RD has a small case for a hike.

3)How it compares to bank RDs?

Bank deposit rates have declined through 2025-26 after the RBI's four rate cuts in 2025. Several banks now offer recurring deposits at rates below the post office's 6.7%. The post office RD therefore remains among the better recurring deposit rates in the market.

4)What the Wednesday's rates mean for you?

The rate applies to the account as opened, so an RD account started now will run its five years on today's terms no matter what future notifications say. On extension after maturity, the rate at which the account was originally opened continues to apply.