Everyone wants to save a portion of their income for the future and prefers to invest in a place where the money is completely safe and yields higher returns than expected. Keeping these needs in mind, the Indian Postal Department runs various small savings schemes, among which the Post Office Recurring Deposit Scheme is very popular. This scheme is considered completely risk-free due to its government patronage, and the interest rate remains stable.
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The government offers an attractive interest rate of 6.7 per cent
The speciality of the Post Office RD scheme is that it offers a stable interest rate of 6.7 per cent on investments. At this interest rate, if a person deposits ₹5,000 every month, they will invest ₹3 lakh in five years. This amount earns approximately ₹56,830 in interest. Thus, the total fund at maturity becomes ₹356,830, which is an example of strong savings through small and regular investments.
Calculations to understand how your fund will grow
This scheme is for five years, and regular deposits are mandatory during this period. However, the real returns are visible when the investor extends it for another five years. In ten years, the total investment amount becomes ₹6 lakh. At an interest rate of 6.7 per cent, the total interest earned during this period is approximately ₹254,272. This means that in a decade, your total fund grows to approximately ₹854,272, with the interest alone being more than ₹2.5 lakh.
Starting with just ₹100
Opening an RD account at a post office is a very simple process. Anyone can start this scheme with just ₹100 by visiting their nearest post office. This facility is useful for those who want to save regularly on a small scale. Additionally, the account can be closed before the completion of five years if needed.
Loan benefits available on RD
Another major advantage of this scheme is that investors also receive a loan against their deposit amount. After operating the account for one year, a loan of up to 50% of the RD amount can be availed, with only a 2% additional interest charge. This facility provides financial support in emergencies and offers the option to meet needs without discontinuing investments.
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Large and secure returns on small investments
The Post Office Recurring Deposit Scheme is an excellent option for those who want to accumulate a large corpus through regular savings over a long period. Features such as government guarantee, stable interest rates, and loan facility make it one of the most popular small savings schemes in the country.