RD late payment penalty
What a missed recurring deposit instalment costs, at a bank and at the post office.
At the post office, the rule is published
₹1 for every ₹100 of the instalment, for each month of default. Four defaults and the account is discontinued, though you have two months to revive it.
At a bank, it depends on the bank
Some charge a fee per ₹100 per month, some charge nothing at all and simply extend the term. There is no RBI rule setting the amount, so the only reliable source is your own bank's schedule of charges.
Missing several in a row is the real risk
Banks that do charge typically close the account after six consecutive misses and pay out what has accumulated at a reduced rate. The fee is small; losing the rate is not.
Record this deposit once and the app does the rest: reminded before it matures, told the day TDS starts at that bank, and the rules of the product explained with your own numbers. Free, and your deposits stay on your phone.
Get it on Google PlayQuestions people ask
Does a late payment change the maturity date?
At most banks the date holds and the fee comes off the maturity amount. At the post office the term extends by the number of months in default.
Can I pay two instalments in one month?
Yes, and at the post office paying ahead earns a rebate.
What if I set up auto-debit and the balance was short?
It counts as a default. The bank retries on its own schedule, which may be after the fee has been applied.
Can I reduce the instalment?
No. The amount is fixed when the account is opened. You would have to close it and open a smaller one.
Is the fee tax deductible?
No.