Post Office Scheme: If you are planning to invest and want your money to be completely safe, along with earning a good return, then Post Office Small Savings Schemes can be a reliable option for you. Through India Post, the government runs several savings schemes for people of different ages and needs, in which the government itself guarantees the security of the investment. One of these is the Post Office Recurring Deposit (RD) scheme, in which you can build a large fund over the long term with regular small savings.

Attractive interest rates in the Post Office RD scheme

The interest rates of Post Office savings schemes are reviewed quarterly. Currently, the Post Office Recurring Deposit scheme offers an annual interest rate of 6.70 percent for a 5-year period. The special feature of this scheme is that an account can be opened with a minimum monthly deposit of just Rs 100. This means that even low-income individuals can easily start investing and gradually build a substantial fund.

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5-year tenure, with the option to extend

The maturity period of the Post Office RD scheme is 5 years. Anyone can open an account in this scheme. Moreover, an account can also be opened in the name of a child aged 10 years or older under the guardianship of a parent. When the child turns 18, they can operate the account themselves after completing the necessary KYC updates. If the investor wishes, the scheme can be extended for another 5 years after maturity.

Pre-mature closure and nominee facility

This scheme also offers the option of closing the account prematurely if needed. The investor can opt for premature closure after 3 years of opening the account. Additionally, if the account holder dies for any reason, the nominee can claim the deposited amount or continue the account if they wish. Loan Facility Also Available

Another feature of the Post Office RD scheme is that it also provides a loan facility. After the account is at least one year old, the investor can take a loan of up to 50 percent of their deposited amount. An additional interest of approximately 2 percent is charged on this loan. The account can be easily opened at any nearby post office.

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How to Create a Fund of Rs. 20 Lakhs

Now, let’s discuss the calculation that can help create a substantial fund from small savings. If a person saves about Rs. 400 daily, this amounts to approximately Rs. 12,000 per month. If this amount is deposited regularly in the Post Office RD scheme, the total amount at maturity after 5 years will be approximately Rs. 8.56 lakhs.

If the investor extends this RD for another 5 years, the total investment will be around Rs. 14.40 lakhs. After 10 years, they can receive approximately Rs. 20.50 lakhs. Of this, about Rs. 6.10 lakhs will be the earnings from interest alone.