The National Savings Recurring Deposit Account (RD) can be opened by various individuals, catering to different needs:
(i) Single Adult: Any individual who is an adult can open this account in their own name.
(ii) Joint Account (up to 3 adults): This account can also be opened jointly by up to three adults, with the option of choosing between Joint A or Joint B.
(iii) Guardian on behalf of Minor: A guardian can open the RD account on behalf of a minor, ensuring a secure savings avenue for the young beneficiary.
(iv) Guardian on behalf of Person of Unsound Mind: In the case of a person of unsound mind, a guardian can open and manage the RD account on their behalf.
(v) Minor above 10 years in their own name: A minor aged above 10 years can open this account in their own name, fostering a habit of saving from an early age.
These different options allow for greater flexibility in accessing the National Savings Recurring Deposit Account, catering to diverse circumstances and requirements.
Deposits in the National Savings Recurring Deposit Account (RD)
(i) Account Opening: The account can be opened by depositing cash or by submitting a cheque. In the case of a cheque deposit, the date of deposit will be considered as the date of clearance of the cheque.
(ii) Minimum Monthly Deposit: A minimum amount of Rs. 100 is required for monthly deposits, and subsequent deposits should be made in multiples of Rs. 10 or above.
(iii) Deposit Deadline for Accounts Opened up to 15th Day: For accounts opened up to the 15th day of a calendar month, subsequent deposits should be made until the 15th day of each month.
(iv) Deposit Deadline for Accounts Opened between 16th and Last Working Day: If the account is opened between the 16th day and the last working day of a calendar month, subsequent deposits should be made until the last working day of each month.
By adhering to these deposit guidelines, account holders can effectively manage their savings and ensure regular contributions towards their National Savings Recurring Deposit Account.
Default scenarios in the National Savings Recurring Deposit Account (RD)
(i) Default Charges: In case subsequent deposits are not made on or before the prescribed day for a particular month, a default fee will be charged. The default fee is Rs. 1 for a 100 rupee denomination account, with a proportionate amount for other denominations.
(ii) Prioritizing Defaulted Deposits: If there are monthly defaults in the RD account, the depositor must first settle the defaulted monthly deposit along with the applicable default fee before making the current month’s deposit.
(ii) Discontinued Account and Revival: After four regular defaults, the account becomes “discontinued.” However, the account can be revived within two months from the fourth default by paying the due amount. If not revived within this period, no further deposits can be made, and the account remains in a discontinued state.
(iii) Extension of Maturity Period: In case there are not more than four defaults in monthly deposits, the account holder has the option to extend the maturity period of the account by the number of defaulted months. During this extended period, the defaulted installments can be deposited to regularize the account.
By understanding the default rules and their implications, account holders can effectively manage their RD accounts, ensuring timely deposits to avoid any disruptions in their savings plan.
Advance deposit facilities in the National Savings Recurring Deposit Account (RD)
(i) Non-Discontinued Accounts: For RD accounts that are not discontinued, account holders can make advance deposits for up to a period of 5 years.
(ii) Rebate on Advance Deposit: Enjoy attractive rebates on advance deposits. If you deposit at least 6 installments in advance (including the month of deposit), you will receive a rebate. For Rs. 100 denomination, you get a rebate of Rs. 10 for a 6-month advance deposit and Rs. 40 for a 12-month advance deposit.
(iii) Flexible Timing for Advance Deposit: Account holders have the flexibility to make advance deposits either at the time of opening the account or at any point thereafter.
With the option to make advance deposits, account holders can plan their savings more effectively and benefit from attractive rebates, maximizing the potential returns on their National Savings Recurring Deposit Account.
Loan facilities in the National Savings Recurring Deposit Account (RD)
(i) Eligibility: After depositing at least 12 installments and continuing the account for one year without any discontinuation, depositors may avail a loan facility of up to 50% of the credit balance in their RD account.
(ii) Repayment Options: The loan can be repaid either in a single lump sum or through equal monthly installments.
(iii) Interest Rate: The interest on the loan will be charged at a rate of 2% in addition to the RD interest rate applicable to the account.
(iv) Interest Calculation: Interest on the loan will be calculated from the date of withdrawal until the date of repayment.
(v) Maturity Deduction: If the loan remains unpaid until the maturity date of the RD account, the outstanding loan amount along with accrued interest will be deducted from the maturity value of the RD account.
Please note that to apply for a loan, depositors must submit a loan application form along with their passbook at the concerned Post Office. By adhering to these guidelines, depositors can access the loan facility and manage their financial requirements effectively while maintaining their RD account’s growth.
Premature closure of the RD Account
If the account is closed prematurely, even one day before its maturity, the prevailing PO Savings Account interest rate will be applicable.
It’s important to note that no premature closure of the account is allowed until the completion of the period for which the advance deposits have been made.
Repayment in the event of the account holder’s demise
(i) Claim Submission: In the unfortunate event of the account holder’s death, the nominee or claimant can submit a claim at the concerned Post Office to receive the eligible balance of the RD account.
(ii) Continuation of RD Account: After the claim is sanctioned, the nominee or legal heirs have the option to continue the RD account until its maturity. To do so, they need to submit an application at the concerned Post Office.
By following these procedures, the rightful nominee or legal heirs can receive the eligible balance and choose to continue the RD account, honoring the financial legacy of the deceased account holder.
Frequently Asked Questions (FAQs)
1. Who can open a National Savings Recurring Deposit Account (RD)?
A National Savings Recurring Deposit Account can be opened by:
- Single adults
- Joint account (up to 3 adults)
- Guardians on behalf of minors
- Guardians on behalf of persons of unsound mind
- Minors above 10 years in their own name.
2. What is the minimum monthly deposit amount required for an RD account?
The minimum monthly deposit amount for an RD account is Rs. 100, and subsequent deposits should be in multiples of Rs. 10 or above.
3. Can I avail a loan facility against my RD account?
Yes, after depositing at least 12 installments and continuing the account for one year without any discontinuation, you can avail a loan facility of up to 50% of the credit balance in your RD account. The loan can be repaid in lump sum or equal monthly installments.
4. Is it possible to extend the maturity period of the RD account?
Yes, you can extend the maturity period for an additional 5 years by submitting an application at the concerned Post Office. The interest rate applicable during the extension will be the same as when the account was originally opened.
5. What happens in the event of the account holder’s demise?
In the event of the account holder’s death, the nominee or claimant can submit a claim at the concerned Post Office to receive the eligible balance of the RD account. After sanctioning the claim, the nominee or legal heirs have the option to continue the RD account until its maturity by submitting an application.
Conclusion:
The National Savings Recurring Deposit Account (RD) offers a convenient and flexible savings avenue for various individuals, including adults, minors, and joint account holders. With no commitment to maintaining a minimum balance, individuals can easily manage their savings and make regular contributions as per their convenience.
The account also provides attractive options such as advance deposit facilities, loan facilities, and extension of the maturity period, empowering account holders to optimize their savings strategy. In the unfortunate event of the account holder’s demise, the account ensures a smooth transition to the nominee or legal heirs, allowing them to continue the account until its maturity.
Overall, the RD account is designed to cater to the diverse needs of customers and encourages a disciplined approach to savings, ensuring financial security and growth in the long run.
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