Post Office Savings Scheme means safe and guaranteed returns. For those who want to save money little by little and create a good fund for the future, Post Office Recurring Deposit (RD) is a great option.
In this scheme, you can build a large sum of money in a few years by depositing a fixed amount every month. What is Post Office RD?
Post Office Recurring Deposit is a savings scheme where you have to deposit a fixed amount every month. At the end of the tenure, you get a large sum by adding interest to the principal amount. This scheme is run by the central government, so there is almost no risk.
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Currently, the interest in the Post Office RD scheme is calculated at a quarterly compounding rate. The government changes the interest rate from time to time.
What will happen if you deposit Rs 2,000 per month?
Let’s say you deposit Rs 2,000 per month in a Post Office RD and take a tenure of 5 years (60 months).
According to the calculation—
Monthly deposit: Rs 2,000
Total time: 60 months
Total deposit: Rs 2,000 × 60 = Rs 1,20,000
At the end of the tenure at the current interest rate, you will get approximately—
Interest: Rs 22,732
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Total maturity amount: Rs 1,42,732
That is, just by regular savings, you can earn an additional profit of more than Rs 22,000 on your money.
Advantages of Post Office RD
1) It is a government scheme, so the money is completely safe.
2) The account can be opened even with very little money.
3) The habit of regular savings is formed.
4) The returns are good as the interest is compounded.
5) There is also the facility of taking a loan in the middle if needed.
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Who should invest in this scheme?
Post office RD is very suitable for those who want to save money for the future in small amounts from their monthly income, such as employees, housewives, students, small businessmen.
Some important points: RD interest is taxable. It does not provide tax exemption under 80C. If you do not pay the installment on time, you have to pay a penalty.
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Good option. By saving just Rs. 2,000 per month, you can easily build up about Rs. 1.42 lakh in 5 years.
If you think of safe savings with small amounts of money, the Post Office RD scheme is undoubtedly very effective for future needs, children’s education or creating your own secure fund.
