Looking to build a corpus worth lakhs for the future by making small monthly savings, backed by a government guarantee, Then the Post Office Recurring Deposit (RD) scheme is an excellent option for you. This scheme helps you build a corpus worth lakhs of rupees over the long term through safe investments, fixed returns, and regular installments. The most impressive thing is that by depositing just ₹15,000 every month at an annual interest rate of 6.7%, you can build a substantial financial corpus of approximately ₹25 lakh in 10 years.
How to build a corpus of ₹25 lakh
The power of Post Office RD lies in compound interest. If you invest ₹15,000 every month, your corpus grows rapidly at an annual interest rate of 6.7%. In the first five years, your total investment amounts to approximately ₹9,00,000. After interest is added, this amount grows to approximately ₹10,71,000.
Furthermore, if you continue this investment for another 5 years, a total of 10 years, your fund reaches approximately ₹25,68,000 at maturity. The key here is that your total investment is approximately ₹18,00,000, while the fund more than doubles due to the power of interest. This makes RDs exceptionally attractive.
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How do you get such high returns
The interest earned on RD deposits is compounded monthly, meaning that new interest is added to the growing total amount each month. The longer the investment, the greater and more powerful the effect of compound interest becomes. This is why, over a period of 10 years, this scheme accumulates your small monthly investments to create a substantial fund. It is ideal for those who want to save in a disciplined manner and stay completely away from market risks.
Why is Post Office RD the most popular option
The Post Office RD scheme has become the first choice for investors who want fixed returns without any risk. You can start this account with just ₹100 and invest as much as you want, as per your convenience. RD has a lock-in period of 5 years, but it can be extended for another 5 years if needed.
It is a government-guaranteed scheme, so it is not affected by market fluctuations. Many families consider RD as the most reliable option for their children’s education, marriage, or future planning. It is a stable and secure medium away from the volatility of the stock market and mutual funds.
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Easy Process to Open an RD Account
Opening an RD account at the Post Office is quite easy. You can open an account at any nearby post office by submitting your Aadhaar card, PAN card, and a passport-size photo. You can open a single or joint RD account. The minimum first installment is ₹100, after which you can increase or decrease the monthly amount according to your income and convenience. This provides financial independence.