Post Office RD: 6.7% quarterly compounding, fully government-backed
Senior citizens get 0.25–0.5% extra rate on bank RDs
Missed installment attracts penalty (usually ₹1.50 per ₹100 per month)
Premature closure allowed after 3 months with reduced interest
TDS applies if interest exceeds ₹40,000/year (₹50,000 for seniors)
FAQs
Is RD better than FD?
RD is better when you don't have a lump sum to invest — you invest monthly instead. For same rate and tenure, FD gives more interest because the full principal earns interest from day one. RD is ideal for building a corpus through monthly savings discipline.
Can I have multiple RDs?
Yes — you can open multiple RD accounts in the same or different banks. This is useful to stagger maturities (e.g., one every 6 months) so you always have accessible funds without breaking a single large RD.