Regular investments can lead to big returns over time, as emphasized by investment experts. Currently, there are many investment options available in the market, but all come with risks. However, investment options like government schemes, bonds, and bank deposit schemes provide guaranteed returns, making them safer choices. There is no risk involved with these investments.
In this article, we will share all the details regarding these options, their benefits, and how they can help you achieve financial growth.
Bank Deposit Schemes: Fixed Deposits vs. Recurring Deposits
When we talk about bank deposit schemes, the first thing that comes to mind is fixed deposits (FDs). Currently, banks are offering good interest rates on FDs, and senior citizens get higher interest rates compared to regular account holders. If you plan to open a fixed deposit for an elderly family member, banks provide better interest rates for them.
However, fixed deposits may not always keep up with inflation. This means the returns may not be enough to grow wealth significantly over time.
Why are Recurring Deposits (RD) a Better Option?
For those who want to build a large fund by investing small amounts regularly with no risk, recurring deposits (RDs) are a great option. Different banks offer varying RD interest rates, but the Post Office Recurring Deposit Scheme is one of the best choices.
Currently, the central government offers a 6.7% interest rate on Post Office RD. The maturity period is 5 years, but you can withdraw money after 3 years if needed. The best part is that there is no risk, and the money remains completely safe. For small investors, a Post Office RD is a popular and reliable investment option.
Loan Facility Against RD
One of the biggest advantages of RD is that you can take a loan against your deposit. According to Post Office rules, after 12 installments, you can take a loan of up to 50% of the amount deposited.
- The loan can be repaid in one lump sum or installments.
- The interest rate on the loan will be 2% higher than the interest earned on RD.
- This makes it a flexible investment with the option to access funds if needed.
How to Become a Millionaire by Investing ₹6,000 in RD?
- By investing ₹6,000 per month in the Post Office RD Scheme, you can build a big fund in 5 years.
- If you invest ₹6,000 per month, your total investment in 60 months (5 years) will be ₹3,60,000.
- With an interest rate of 6.7%, the total amount you will receive at the end of 5 years is ₹4,45,446.
- This means you will earn ₹85,446 in interest in just 5 years.
- This makes Post Office RD a safe and profitable investment option, especially for those looking for steady returns without market risks.