Many people save small amounts every month, but due to a lack of proper planning, that money doesn’t grow as much as expected, even over the years. For such individuals, the Post Office RD (Recurring Deposit) scheme offers an easy and reliable way to gradually build a strong corpus without any risk. If a person deposits ₹5,000 every month in a Post Office RD for 10 years, how much will they ultimately receive, and how is this entire calculation performed? This information is explained here in simple and clear language.
What is the Post Office RD Scheme
The typical tenure of a Post Office Recurring Deposit (RD) is 5 years. However, few people know that after the completion of 5 years, this RD can be extended for another 5 years. In total, the RD can be extended for 10 years. During this entire period, a fixed amount is deposited every month, and interest continues to accrue. Currently, Post Office RDs offer an interest rate of approximately 6.7% per annum, compounded quarterly. This compounding process makes RDs unique in the long run and gradually expands the fund.
How much will a total investment of ₹5,000 per month yield
If you deposit ₹5,000 every month in a Post Office RD and continue this for 10 years, or 120 months, your total deposit will be ₹600,000. This amount is withdrawn gradually from your monthly savings, so it doesn’t put much pressure on your pocket. However, over time, these small deposits add up to a substantial investment.
How does a maturity fund of ₹854,272 become a reality
Now we come to the question every investor wants to know the answer to. If you run an RD of ₹5,000 per month for 10 years, considering the current interest rate, the total amount at maturity becomes approximately ₹8,54,272. This means that your total deposit is ₹6 lakh, but after adding interest, you get an additional profit of approximately ₹2,54,272. This is the true power of RD, where time and compound interest combine to turn even a small amount into a strong fund.
Who is a 10-year RD suitable for
This RD is ideal for those with a regular income and can easily save ₹5,000 each month. It is a safe and reliable option for working individuals, small businesses, women, and families planning for children’s education, marriage, or other major expenses in the future. It requires no daily market monitoring and carries no risk. If you don’t need the money immediately, it’s wise to continue the RD for the full term to reap the full benefits of compound interest.
Post Office RD is a fully government-funded scheme, so your money is completely safe. It’s not affected by market fluctuations, and there’s no risk of losing money. Due to its fixed term, fixed interest rate, and secure returns, this scheme has remained a favorite among middle-class families for years.
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