Post Office Recurring Deposit Scheme: If you’re looking for a safe investment with guaranteed returns, the Post Office RD scheme could be a great option for you. It’s a small savings scheme that provides a substantial deposit in your bank account upon maturity. Investing in the Post Office RD scheme is especially beneficial for investors who can’t afford a large sum of money at once, but are able to invest small amounts every month. This scheme offers many benefits. Let’s explore them in detail.
How much interest is earned?
Investments in the Post Office RD scheme are required for a period of 5 years. However, this period can be extended for another 5 years. The annual interest rate in this scheme is 6.7%. The government adjusts interest rates every quarter. However, once the account is opened, the interest rate remains fixed for the entire period. Therefore, this scheme is considered risk-free.
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What are the rules for investing?
For your information, an account can be opened in this scheme by investing ₹100 monthly. There is no maximum investment limit. Investors can invest monthly as per their convenience. Any citizen of the country can open an account under this scheme. A joint account is also available. Children over 10 years of age can open an account under this scheme. However, a penalty may be imposed for not paying the monthly installment. Let’s find out how much return a 5-year investor earns by depositing ₹50,000 monthly. What return will an investor earn if they deposit ₹50,000 monthly for 5 years?
How much return will accrue on ₹50,000 monthly?
If an investor invests ₹50,000 monthly for 5 years, they will earn ₹6 lakh annually. Consequently, they will accumulate ₹30 lakh in 5 years. Accordingly, at an interest rate of 6.7%, the interest alone would generate an income of ₹5,68,291. The total income would be ₹35,68,291.
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Benefits of Post Office RD
This is a government scheme of the Post Office. As such, the deposit amount and returns are guaranteed. Interest is calculated every three months. The benefits are substantial. You can open an account under this scheme at any post office. After opening, a loan facility of up to 50% of the deposited amount is available. The account can be opened after three years from the date of account opening, subject to certain conditions.