Post Office FD vs RD: Which will generate higher returns on Rs 5 lakh investment in 5 Years?

What is Post Office Fixed Deposit (FD)?

Post Office FD is a small savings scheme offered by India Post where individuals can deposit a lump sum amount for a fixed tenure, and in return, they earn interest on that amount at a predetermined rate. 

What is Post Office Recurring Deposit (RD)?

Post Office RD is a savings scheme offered by India Post where individuals can make fixed monthly deposits for a specified tenure, ranging from 1 to 5 years. 

Post Office FD

The tenure for Post Office FDs ranges from 1 to 5 years. It is a government-backed investment option, offering attractive interest rates and providing security for your invested amount. 

What is the minimum amount for opening post office FD account?

The minimum amount for a one-time investment is Rs 1,000, while there is no maximum limit.

Interest Rates on Post Office FDs:

Rate of interest w.e.f 01.07.2025 to 30.09.2025

• 1-Year FD: 6.9 per cent interest rate
• 2-Year FD: 7.0 per cent interest rate
• 3-Year FD: 7.1 per cent  interest rate
• 5-Year FD: 7.5 per cent  interest rate

Account opening in RD

An RD account can be opened in any post office through a savings account. It can be opened offline and online. 

Maturity period of post office RD

The maturity period of the post office RD is 5 years. The account can be extended for 5 years. 

What is the deposit amount in post office RD account?

The minimum amount for a monthly deposit in a post office RD is Rs 100 and above.

Interest Rate of Post Office RD

Rate of interest w.e.f 01.07.2025 to 30.09.2025​, interest rate of Post Office RD is 6.7​ per cent per annum (quarterly compounded)

Post office FD calculations: Returns on Rs 5 lakh lump sum investment?

• Time period: 5 years
• Total Investment Amount: Rs 5,00,000
• Interest Rate: 7.5 per cent per annum 
• Interest earned: Rs 2,24,974
• Maturity Value: Rs 7,24,974

Post office RD calculations: Returns on a Rs 8,333 monthly investment?

• Time period: 5 years
• Total Investment Amount: Rs 5,00,000
• Interest Rate: 6.7 per cent per annum 
• Interest earned: Rs 1,97,033
• Total Value at Maturity: Rs 6,97,033

Also Read: PPF Calculation: How many years will it take to generate Rs 17 lakh/year tax-free income from Public Provident Fund?