Regular investment can yield big returns in the long run. This is what investment experts say. Currently, there are many investment options in the market, but most of them come with some level of risk. However, investments like government schemes, bonds, and bank deposit schemes provide guaranteed returns with no risk involved.
When it comes to bank deposit schemes, the first option that comes to mind for most people is Fixed Deposits (FDs). There is nothing wrong with this choice, as banks are currently offering very good interest rates on FDs. For senior citizens, the interest rates are even higher than those for the general public. If someone wants, they can also open a fixed deposit in the name of an elderly family member in the bank.
In this article, we will share all the details about how you can invest ₹5000 and secure ₹8 lakh through a special scheme of the post office.
Why Choose a Recurring Deposit Over a Fixed Deposit?
Fixed Deposits (FDs) may not always keep up with inflation. If you want to build a large fund by investing a small amount regularly without any risk, a Recurring Deposit (RD) is a popular choice. Different banks offer RDs at different interest rates, but the Post Office Recurring Deposit Scheme is an ideal option.
Post Office Recurring Deposit (RD) Details
- The current interest rate on Post Office RD is 6.7% (set by the central government).
- The maturity period is 5 years, but you can withdraw the money after 3 years if needed.
- The best part about RD is that it is completely risk-free and ensures capital protection.
- Investors can also take a loan against their RD account. According to Post Office RD rules, after 12 installments, you can take a loan up to 50% of the deposited amount. The loan interest rate is 2% higher than the RD interest rate.
How to Build a Large Fund with RD?
If you invest ₹5000 per month in a Post Office Recurring Deposit, here’s how your money will grow:
Returns After 5 Years
- Total Investment: ₹3,00,000
- Interest Earned: ₹56,830
- Total Maturity Amount: ₹3,56,830
Returns After 10 Years
- Total Investment: ₹6,00,000
- Interest Earned: ₹2,54,272
- Total Maturity Amount: ₹8,54,272
In conclusion, we can say that a Post Office RD is a safe and reliable way to grow your savings. By investing ₹5000 per month, you can secure a fund of ₹8.54 lakh in 10 years. It is an excellent choice for small investors looking for risk-free returns.