Post Office: The Post Office offers a range of excellent schemes that provide impressive returns. Participating in these schemes can prove to be highly rewarding. Some Post Office schemes are particularly noteworthy, offering government-backed security for investments; this means your capital remains safe while also generating future profits.
You have likely heard of the Post Office Recurring Deposit (RD) scheme. It is a special scheme that allows you to build a corpus of ₹17 lakh by saving just ₹333 per day. Even small investments in this scheme can yield substantial returns. You can learn the key details of the scheme in the article below, which will clear up any doubts you might have.
Impressive Interest Rates
The Post Office Recurring Deposit scheme offers attractive interest rates. Think of it as a government-backed savings pool where small, regular investments earn significant returns, allowing you to accumulate a substantial fund. Regarding the interest rate, the government offers an impressive 6.7% return on investments made in this scheme.
Account Opening Details
Opening an account under the Post Office RD Scheme—one of the most popular small savings schemes—is very easy; you can simply visit your nearest post office to get started. A key feature is that you can open a Recurring Deposit account with an initial investment of just ₹100. The scheme also offers the flexibility to open either a single or a joint account.
Option to Extend Maturity
The standard maturity period for the Post Office Recurring Deposit scheme is five years. However, investors also have the option to extend the tenure by another five years. To reap the full benefits of the scheme, it is important to make your investments on time. If you miss making a scheduled instalment payment for the RD scheme in any given month, a penalty of 1% per month will be charged; furthermore, if you miss four consecutive instalments, the account will be automatically closed.
How to build a fund of ₹17 lakh
To accumulate a fund of ₹17 lakh under this scheme, you need to save ₹333 daily. Through such regular savings, you would accumulate approximately ₹10,000 per month. If you invest this amount monthly in the Post Office Recurring Deposit scheme, your total deposit over the five-year maturity period would be ₹6 lakh, and the interest earned would be ₹1,13,659, resulting in a total fund of ₹7,13,659.
Now, based on the scheme’s provisions, if you extend the investment for another five years, your total investment over 10 years would amount to ₹12 lakh, while your total fund would grow to ₹17,08,546. The interest earned alone would amount to ₹5,08,546.
