If you want to create a good fund by investing some amount every month in a safe place, then the Post Office Recurring Deposit (RD) scheme can prove to be a better option for you. This scheme is fully supported by the Government of India, so the money invested in it remains completely safe.
How much can you start with
The specialty of this scheme is that any person can start investing a minimum of Rs 100 per month or in multiples of Rs 10. There is no maximum limit of investment, that is, you can deposit every month according to your capacity and need.
Interest rate and investment period
The duration of the Post Office RD scheme is 5 years, i.e., 60 months. Currently, 6.7 percent annual interest is being given on it. After completion of five years, investors can extend it for the next 5 years if they want.
Calculation of return on investment
If an investor deposits Rs 6000 every month in this RD account for 60 months, then after five years, he will have a total of Rs 4,28,197. This will include the total investment amount of Rs 3,60,000 and Rs 68,197 earned from interest. In this way, this scheme allows creating a big fund from small savings.
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A loan facility is also available
Another feature of this scheme is that after keeping the account active for at least 12 months and making regular monthly deposits, the investor can take a loan of up to 50 percent of the deposit amount. This loan can be repaid in a lump sum or in monthly installments.