In today’s volatile market, most investors seek schemes where their money is completely safe and provides reliable returns. For such investors, Post Office Small Savings Schemes are considered a strong option. These schemes are backed by the Government of India, providing investors with complete capital security.
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What is the Post Office Recurring Deposit Scheme?
The Post Office Recurring Deposit (RD) scheme is a savings plan where investors deposit a fixed amount every month. This scheme is specifically designed for people who want to save small amounts to build a large fund for the future. An account can be opened with just ₹100, making it accessible to people of all income groups.
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Interest Rate and Government Guarantee
The government is currently offering an annual interest rate of 6.70 percent on this Post Office RD scheme for a 5-year period. The interest rates for this scheme are reviewed every three months. Since this scheme is directly managed by the government, it is not affected by market risks, and the investment remains completely secure.
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Maturity Period and Account Facilities
The basic maturity period of the Post Office RD scheme is 5 years. However, if the investor wishes, it can be extended for another 5 years after maturity. An account can be opened for adults as well as minors aged 10 years or older, which is operated by their parents or guardians. Upon reaching 18 years of age, the account holder can manage the account themselves.
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Pre-mature Closure and Nomination Benefits
This scheme also offers flexibility to the investor when needed. The facility of premature closure is available after three years of opening the account. Additionally, in case of the account holder’s death, the nominee can claim the deposited amount or continue the account if they wish.
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Loan Facility Available
One of the special features of the Post Office RD scheme is that it also offers a loan facility. If the account is at least one year old, the investor can take a loan of up to 50 percent of their deposited amount. The interest rate on this loan is only 2 percent higher than the deposit interest rate, making this facility quite affordable.
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How to build a fund of Rs 20 lakh by saving Rs 400 daily
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If a person saves Rs 400 daily, this amounts to Rs 12,000 per month. If this amount is regularly deposited in the Post Office RD scheme, the total maturity amount after 5 years will be approximately Rs 8,56,388. If the investor then extends this RD for another 5 years, the total investment will be Rs 14.40 lakh. After completing the 10 years, they can receive approximately Rs 20,50,248, with more than Rs 6 lakh earned solely from interest.