In today’s economic world, everyone wants to earn big money. If one wants to build a substantial fund by saving a small amount, then the Post Office Recurring Deposit (RD) Scheme can be a good option. This scheme eliminates the need to block capital at once. Recurring deposits offer the opportunity to deposit small amounts every month, similar to mutual fund SIPs. Post offices offer the option of opening a recurring deposit account. The interest on recurring deposits is similar to that of fixed deposits, which encourages long-term investment.
This scheme offers an annual return of 6.7 percent. It offers compound interest, which means that interest is earned on interest. Therefore, if one invests Rs. 5,000 every month for five consecutive years, a total of Rs. 3 lakh will be invested. After maturity, Rs. 3,56,830 will be available. In this case, a total profit of Rs. 56,830 can be made from this scheme.
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What you should know about Post Office RD Scheme Post Office RD Scheme is considered a good investment option. One can open an account by depositing Rs 100. There is no maximum deposit limit. A minor above 10 years of age can also open an account with his parents. After attaining the age of 18, he will have to fill a new KYC and form. However, the tenure of Post Office RD is 5 years. This means that if someone invests, then he has to wait for at least 5 years.
If one wants, one can close the account after 3 years of opening the account. In case of death of the account holder, the nominee can either claim the money or continue the account. This account can also be opened through mobile banking or e-banking.
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How to create a fund of Rs 17 lakh
The post office offers a fixed return of 6.7% on recurring deposits. A minimum of Rs 100 can be invested in this scheme. However, to accumulate Rs 1.7 million, one has to invest Rs 333 daily or about Rs 10,000 per month. If one invests Rs 10,000 per month, then a fund of Rs 1.7 million can be easily collected in just a few years.
Funds are created without risk
Funds can be created without risk at the post office. Your money is completely safe here. Therefore, it is a better investment option than other investment options. However, one should invest prudently and consult a financial advisor.