Post Office Recurring Deposit (RD) is a reliable option for those who want to build a substantial fund for the future by saving a fixed amount every month. This scheme, guaranteed by the Government of India, not only protects your money but also helps your investment grow rapidly with an annual interest rate of 6.7% and quarterly compounding.
Whether you start with ₹100 or deposit ₹5,000 per month, this scheme promises excellent returns over a period of 5 years. In this article, we will explore in detail how much you will receive upon maturity for different investments.
How Post Office RD Works
The Post Office RD scheme requires you to deposit a fixed amount every month for 60 months, or five years. Its most significant advantage is that it offers the benefit of compound interest. This means that you earn interest on your principal as well as the quarterly interest, resulting in a significantly higher maturity amount than ordinary savings. The interest earned on each monthly installment compounds over time, allowing your money to grow powerfully over the long term.
₹100 to ₹1500 Savings
If you want to start with a very small amount, depositing just ₹100 per month will result in a total investment of ₹6,000 in 5 years, and you will receive approximately ₹7,176 at maturity. If you increase your savings to ₹500 per month, you will accumulate ₹30,000 in 5 years, giving you a return of ₹35,880.
Similarly, a ₹60,000 investment grows to ₹71,761 with a monthly savings of ₹1,000. Those who save ₹1,500 every month accumulate ₹90,000 in 5 years, and with 6.7% interest, they receive a substantial ₹1,07,642. This is ideal for those who want to accumulate money gradually for small future needs.
Monthly savings of ₹2,000 to ₹5,000
For those who want to invest a portion of their income in safe investments, a large RD is very beneficial. If you deposit ₹2,000 every month, your investment will grow to ₹1,20,000 in 5 years, and you will receive approximately ₹1,43,522 at maturity. An investment of ₹1,80,000 with a monthly RD of ₹3,000 grows to ₹2,15,284.
The best returns are obtained by saving ₹5,000 per month. In this, you will accumulate a total of ₹3,00,000 over 5 years, but at maturity, you will receive approximately ₹3,58,807. Here, you earn a direct profit of over ₹58,800 from interest alone. This fund can provide a strong foundation for your children’s higher education or any major auspicious event.
Investing in a Post Office RD and what are its benefits
The Post Office RD scheme is suitable for those who wish to avoid market fluctuations, i.e., the risk of stock market fluctuations. For middle-class families, it is an excellent way to practice disciplined savings. This scheme is most popular in rural areas, where post offices are more accessible than banks. The entire investment is 100% guaranteed by the Government of India, so your money is completely safe. Whether it’s your children’s education, marriage, or home renovation, this scheme helps you achieve every major goal.