Whenever we talk about investment schemes that offer safe and guaranteed returns, the post office always comes to mind first. Among the many schemes offered by the post office, the 5-year Recurring Deposit (RD) is one of the most popular and trusted options for saving among common Indian families. In this scheme, you can save a good amount over five years by depositing a small, fixed amount every month. At present, the Post Office RD offers an interest rate of 6.7% per annum, which is higher than many bank FDs.
However, the basic rule of an RD is discipline — you must deposit your monthly instalment on time. But sometimes, due to financial problems or other reasons, we may miss one or more monthly deposits. In such cases, a common question arises — what happens if 2–3 RD instalments are missed? Will the account be closed, or can we just pay a penalty and continue? Let’s understand all the rules related to missed instalments in the Post Office RD.
When is the Account Closed?
If you miss your RD instalment for any month, your account does not close right away. The post office gives you a chance to pay the missed amount later with a small penalty. The penalty is ₹1 for every ₹100 each month. This means you will have to pay 1% extra on the due instalment.
For example, if your monthly RD instalment is ₹2,000 and you miss it by one month, then you will have to pay ₹20 as a penalty. So, you will pay ₹2,020 in total. This rule will apply every month until you pay the pending amount.
After How Many Missed Payments is the RD Account Closed?
As per the post office rules, if you do not pay your RD instalment for four months in a row, then your account will be marked as “discontinued”. In that case, you cannot deposit any more money, and the account will become inactive.
Time Limit to Reactivate the Account
If your RD account is discontinued due to missing four instalments, then do not worry. The post office gives you a chance to reactivate the account. You must apply within two months from the fourth missed month.
To reactivate your account, you need to visit your post office and submit a request to start the account again. You will also have to pay all the missed instalments along with the penalty. After this, your RD account will become active again, and you can continue it as usual. But if you do not do this within two months, then your account will be closed forever, and you cannot invest in it again.
How to Avoid RD Account Closure During Financial Trouble?
If you feel that your financial condition is weak and you will not be able to pay your RD instalments for the next few months, then you should act early. Before missing four payments, you can go to the post office and ask them to increase the maturity period of your RD account by the number of months you cannot pay. This way, your account will not close, and you can continue saving without losing benefits.