If you have a monthly income and want to make small savings regularly, then State Bank of India’s ‘Har Ghar Lakhpati’ RD scheme (Recurring Deposit) is a great option for you! This scheme is specially designed for those who want to make safe and goal-based savings by staying away from market risk. Whether you have to create a fund for your daughter’s marriage or a down payment for buying a house, this scheme can help fulfil your dreams.

What is the ‘Har Ghar Lakhpati’ Scheme

This scheme is open to all Indian residents. You can open it alone, jointly, or in the name of a minor with a guardian. If the child is more than 10 years old and can sign, then they can also open their account.

Interest rates vary according to age and tenure

This RD scheme of SBI offers attractive interest rates, which depend on your age and deposit tenure.

Interest rates for general citizens:-

For 3 and 4 years: 6.75% per annum

For 5 to 10 years: 6.50% per annum

Interest rates for senior citizens:-

For 3 and 4 years: 7.25% per annum (this is the highest!)

For 5 to 10 years: 7.00% per annum

Interest is calculated every quarter, which gives you better returns on the total maturity amount.

What will happen if you close the account prematurely?

Sometimes you may need money suddenly. In such a situation, there are some rules for closing the RD prematurely. For deposits up to ₹5 lakh, a penalty of 0.50% will be charged for premature closure. For amounts above ₹5 lakh, the penalty will be 1%. Interest will be paid at the rate that is obtained after deducting the penalty rate, or the scheme rate, whichever is lower. If the RD runs for less than 7 days, no interest will be paid.

How much return from how much savings

Below are some estimates that can help you understand how much money you can get from monthly savings.

Monthly deposit for estimated maturity of ₹2 lakh

Tenure           Ordinary citizen               Senior citizen

3 years                 ₹5,002.44                     ₹4,963.42

5 years                 ₹2,817.27                      ₹2,780.37

7 years                 ₹1,878.87                      ₹1,843.96

Monthly deposit for estimated maturity of ₹5 lakh

Tenure                Ordinary citizen                Senior citizen

3 years                   ₹12,506.10                        ₹12,408.55

5 years                   ₹7,043.16                           ₹6,950.93

7 years                   ₹4,697.17                            ₹4,609.91

If a normal citizen deposits ₹5,002.44 monthly for 3 years, he will get around ₹2 lakh on maturity.

Why choose it

Gradually build a big fund with monthly investments. Tax benefits under section 80C allow you to avoid TDS (tax deduction at source) if you submit Form 15G/15H. This scheme is completely free from market risk, keeping your money safe. On maturity, you receive a lump sum amount. The account can be opened both online and offline.