Post Office RD: Do you also want to create a big fund for the future by saving a little every month, that too without any risk? Then, the Post Office RD (Recurring Deposit) is a great government investment scheme for you. In this, you have to deposit a fixed amount every month for 5 years, and after the completion of 5 years, you get your entire deposit amount back with interest.
But one small mistake of yours can turn this bumper profit into a big loss. Let us know in detail in this article what mistakes you should not make, what the rules of this scheme are, and how you can get guaranteed returns on your savings.
Why is Post Office RD the best investment option
The biggest feature of Post Office RD is its security and attractive interest rate. It is a government scheme, so there is no risk of your money sinking. Currently, 6.7% annual interest is being given on Post Office RD, which is more than the fixed deposit (FD) rates of many banks. This is a great way to turn small savings into a large amount, especially for those who like to invest every month.

This 1 mistake can cause you a huge loss
The biggest mistake that investors make is to break their RD before maturity (Premature Closure). If you are in dire need of money and you close this account before the completion of 5 years, then you may have to suffer a huge loss.
How will your interest decrease
According to the rule, if you close the RD prematurely, you will be given interest equal to the post office savings account, instead of 6.7%. Currently, only 4% interest is being received on the savings account. This means that your interest will be reduced by 2.7% directly. This will reduce your total return substantially, and you will not get the profit you expected to earn.
When can you break RD
If there is an urgent need, you can close it after 3 years from the date of opening the account. But remember, even if you close it a day before maturity, the interest rate will still be 4%. Therefore, unless there is a very big and unavoidable emergency, it is wise to avoid breaking it.
What to do after 5 years
If you do not need money immediately after the completion of 5 years, you can extend this RD account for another 5 years (extension). For this, you just have to apply. The best part is that the old 6.7% interest rate will continue to apply to your extended account.
This is a great option for those who want to invest for the long term and want to let their savings grow without any interruption. This will allow you to take more advantage of compounding.
Who can open a Post Office RD account
The process of opening a Post Office RD account is very simple. Any Indian citizen above the age of 18 years can open this RD account. Parents can also open this account in the name of their children. 2 or 3 people can also open a joint account, making it easier for family members to save together.
Required Documents
Identity Proof (Aadhaar Card, PAN Card)
Address Proof
Passport Size Photo