People have trusted the Post Office’s small savings schemes for years. This is due to government security, fixed interest rates, and minimal risk. The Recurring Deposit (RD) scheme is especially useful for those who want to build a strong financial foundation for the future by saving small amounts every month. This scheme is rapidly gaining popularity among salaried individuals, small business owners, and middle-income investors.

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A Large Fund Can Be Created Through Small Daily Savings

The best thing about this scheme is that you don’t need to invest a large sum of money at once. If a person saves approximately Rs 333 every day, they can easily deposit Rs 10,000 every month into their RD account. With continuous investment, the accumulated amount and interest can create a fund of over Rs 17 lakhs in 10 years. This example shows that with discipline and regular investment, even small savings can grow into a large sum.

Current Interest Rate and Facility to Open Accounts in Children’s Names

Currently, the Post Office RD offers an annual interest rate of 6.7 percent. This interest is compounded quarterly, resulting in better returns over the long term. Another special feature of this scheme is that an RD account can be opened in the name of children above 10 years of age. After the child turns 18, they can update their KYC and continue the account in their own name. Digital facilities also allow for opening accounts through mobile banking and e-banking.

Five-Year Term and Option to Extend

The basic term of a Post Office RD is five years. However, investors can extend it for another five years if they wish. This means that investments can be continued for a total of 10 years. This option proves particularly beneficial for long-term investors, as the benefit of compounding interest increases over time.

Facilities Related to Account Closure, Loans and Nominees

This scheme also offers investors several additional facilities. The option to close the account is available after three years of opening it. In the event of the account holder’s death, the nominee has the right to claim the entire amount. Additionally, a loan can be taken against the deposited amount in the RD account after one year, eliminating the need to break the investment in case of a sudden financial need.

How much is the maturity amount in 10 years?

If an investor deposits ₹10,000 every month, a total of ₹6 lakh is deposited in the first five years. During this period, approximately ₹1.13 lakh in interest is earned. Continuing the investment for the next five years brings the total deposited amount to ₹12 lakh, and the total interest earned over the entire 10 years reaches approximately ₹5.08 lakh. Thus, the total amount at maturity is approximately ₹17,08,546.

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A beneficial scheme even for those with smaller investments

This scheme is not limited to high-income investors. Even if a person deposits only ₹5,000 every month, a fund of approximately ₹8.54 lakh can be created in 10 years. A loan facility of up to 50 percent of the deposited amount is also available after one year. The interest rate on the loan is only 2 percent higher than the normal interest rate, significantly reducing financial stress during times of need.