Post Office RD Calculator — ₹5,000 Per Month for 5 Years

How Much Will 5000 Rupees Per Month Grow in a Post Office RD?

What happens when you deposit 5000 rupees every month in a Post Office Recurring Deposit for 5 years? You get back approximately 3,56,830 rupees. That is 56,830 rupees in interest on a total deposit of 3,00,000 rupees. The math is clear, and this article shows you exactly how this government savings scheme in India calculates your returns.

Post Office RD is one of the simplest savings products available. No market risk, no fluctuating NAV, no lock-in surprises. You put in a fixed amount every month, and you get a guaranteed sum at maturity. But most people never check the actual numbers before starting one. That is a mistake.

1. The Interest Rate and How It Works

The Post Office RD currently offers 6.7 percent per annum, compounded quarterly. This rate is set by the Government of India and revised every quarter. It has stayed between 5.8 percent and 6.7 percent over the last few years.

Quarterly compounding means the interest earned each quarter is added to your balance, and the next quarter's interest is calculated on this higher amount. This is better than simple interest, where interest is only calculated on the original deposit.

At 6.7 percent compounded quarterly, your 5000 rupees monthly deposit earns roughly 18.9 percent total interest over 5 years — not bad for a zero-risk product.

The rate can change for new deposits if the government revises it. But once you open an RD, your rate is locked for the full 5-year term. This is an advantage over floating-rate products.

2. The Complete Maturity Calculation

Here is the breakdown for a 5000 rupees per month RD over 5 years (60 months) at 6.7 percent compounded quarterly:

The formula used is: MV = P × [(1 + r/n)^(n×t) - 1] / [1 - (1 + r/n)^(-1/3)], where P is the monthly deposit, r is the annual rate, n is the compounding frequency (4 for quarterly), and t is the tenure in years.

The math is slightly complex because each monthly instalment earns interest for a different number of quarters. Your first deposit earns interest for all 20 quarters. Your last deposit earns interest for just one quarter. The total interest is the sum across all 60 instalments.

3. Year-by-Year Growth Projection

Here is how your Post Office RD balance grows each year:

Notice how the interest earned accelerates each year. In year 1, you earn about 2,040 rupees. In year 5, you earn about 21,920 rupees. That is the compounding effect — each quarter's interest earns interest in subsequent quarters.

4. Tax Treatment You Should Know

Post Office RD interest is fully taxable. It is added to your income and taxed at your slab rate. There is no Section 80C deduction for RD deposits — unlike PPF or tax-saving FDs.

If you are in the 20 percent tax bracket, your effective return drops from 6.7 percent to about 5.36 percent after tax. In the 30 percent bracket, it drops to about 4.69 percent. This is the biggest drawback of this government savings scheme in India compared to PPF, which is entirely tax-free.

TDS (Tax Deducted at Source) applies if total interest across all your post office deposits exceeds 40,000 rupees in a financial year (50,000 rupees for senior citizens). For a 5000 rupees monthly RD, your annual interest is well under this limit in the early years.

5. How Post Office RD Compares to Alternatives

Is a Post Office RD the best place for 5000 rupees per month? That depends on what you want.

If your goal is safe, predictable returns with no market risk, Post Office RD delivers. If you can handle some volatility and have a longer time horizon, an equity SIP will likely beat it. If you want tax benefits, PPF is the better government scheme.

Post Office RD is best for people who want a disciplined savings habit with guaranteed returns and no decisions to make. It is not the highest-return option, but it is the simplest.

6. How to Open a Post Office RD

You can open a Post Office RD at any India Post branch or through the India Post mobile banking app. The minimum monthly deposit is just 100 rupees. There is no maximum limit. You need your Aadhaar, PAN, and a post office savings account.

The tenure is fixed at 5 years. If you miss a payment, a small penalty of 1 percent per month on the missed amount applies. You can set up a standing instruction to auto-debit from your post office savings account.

Premature closure is allowed after 3 years with a small interest rate reduction. Before 3 years, closure is only permitted in exceptional cases.

The Bottom Line on 5000 Rupees Per Month for 5 Years

You deposit 3,00,000 rupees over 60 months. You receive approximately 3,56,830 rupees at maturity. That is 56,830 rupees in guaranteed interest at zero risk. For a simple, government-backed savings scheme in India, those numbers are fair. Not spectacular, but reliable. Know the tax impact, compare it with PPF and SIPs, and decide if guaranteed simplicity is worth the modest return.