Rule 10 National Savings Recurring Deposit Scheme Rules 2019
The 5-Year Post Office Recurring Deposit (RD) is among the most popular small savings instruments across India. To meet urgent household, agricultural, or education expenses without breaking the recurring deposit and suffering maturity penalties, the Department of Posts provides a low-cost borrowing facility under Rule 10 of the National Savings Recurring Deposit Scheme Rules, 2019.
Statutory Borrowing Rules & Interest Formula
- Eligibility Horizon: The loan facility unlocks strictly after at least 12 monthly installments have been successfully deposited and the account has completed 1 full year from opening.
- Borrowing Cap: Up to a maximum of 50.00% of the balance standing to credit at the time of application can be withdrawn as loan.
- Statutory Simple Interest (RD Rate + 2%): Unlike bank overdrafts which compound monthly or quarterly, a Post Office RD loan charges purely simple interest at 2.0% above the applicable RD interest rate (e.g. 6.70% + 2.00% = 8.70% p.a.).
- Repayment Flexibility: The loan can be repaid in one single lump-sum or in convenient equal monthly installments. If the loan remains unpaid by the time the RD reaches its 5-year maturity, the remaining principal along with simple interest is deducted directly from the maturity proceeds, and the net balance is disbursed to the account holder.
Frequently Asked Questions (FAQs)
Do I need collateral or a guarantor to take a loan against my Post Office RD?
No. No third-party guarantor or collateral is required. The RD passbook and standing credit balance act as sovereign lien security.