The Post Office Recurring Deposit (RD) is a savings scheme designed keeping in mind the needs of common people. In this scheme, the investor deposits a fixed amount every month and receives the principal amount along with interest upon maturity. The biggest advantage of this scheme is that investment can be started with a very small amount. Currently, it offers an annual interest rate of 6.70 percent, compounded quarterly. Being a government scheme, it is risk-free, making it a safe investment option.
Who can open a Post Office RD account?
The Post Office RD scheme is available to almost every Indian citizen. Salaried individuals, business owners, self-employed individuals, and students can all open an account. An RD account can also be opened in the name of children aged 10 years or older. The account opening process is very simple and can be completed by visiting the nearest post office or online. Once the account holder turns 18, updating KYC is mandatory.
RD Tenure and Extension Facility
The basic tenure of a Post Office RD is 5 years. Importantly, it can be extended for another 5 years after maturity, making the total investment period up to 10 years. If the investor needs money after three years, there is also a facility to close the account. In case of the account holder’s death, the nominee can claim the deposited amount or continue the RD.
How to make a fund of Rs 17 lakh
If a person saves approximately Rs 333 daily, this amounts to about Rs 10,000 per month. In this way, the total deposited amount in 5 years will be approximately Rs 6 lakh. The interest earned during this period could be around Rs 1.13 lakh. If the investor extends the RD (Recurring Deposit) for another 5 years after maturity, the total investment period becomes 10 years. By then, the total deposited amount reaches approximately ₹12 lakh, and the interest earned increases to about ₹5.08 lakh. Thus, the total fund at maturity could be approximately ₹17.08 lakh. This scheme proves beneficial even for those investing smaller amounts.
Why is this scheme beneficial?
The Post Office RD is particularly useful for people with limited income who want to make secure investments for the future. For example, if someone invests ₹5,000 every month in an RD, they can accumulate a fund of approximately ₹8.5 lakh in 10 years. Due to regular savings and the long-term nature of the scheme, it helps small investors build a strong financial foundation.