It is not necessary to have a big amount to start investing. You can begin with your small savings too. The most important things in investment are discipline and patience.
If you invest a small amount regularly every month, you can build a big amount in the long term. The post office’s RD scheme with guaranteed returns can help you in this. This scheme is supported by the government. The government decides the interest rate every three months. In this scheme, after maturity, you get a big amount along with the interest.
Interest Rate on Post Office RD
The Post Office offers a 5-year Recurring Deposit (RD) scheme. Right now, it gives an annual interest rate of 6.7%. This interest is added every three months (quarterly compounding). You can start this RD with just ₹100 per month. There is no upper limit for the investment.
Maturity Can Be Extended Beyond 5 Years
You can extend the maturity period by 5 more years after the first 5 years. Also, once you deposit 12 monthly installments and the account completes 1 year, you can take a loan. The loan amount can be up to 50% of the money in your RD account. The interest on this loan will be 2% more than the RD interest rate.
How to Save ₹15 Lakh in 5 Years
If you invest ₹21,000 every month in the post office RD scheme for 5 years, you will get about ₹15 lakh at maturity. In this case, your total savings after 5 years will be ₹14,98,682. Out of this, ₹12,60,000 will be your total investment and ₹2,38,682 will be the interest earned.
More Read
If You Extend It by 5 More Years
If you extend the RD for another 5 years (total 10 years), your savings will grow even more. After 10 years, you will receive ₹35,87,944. Out of this, ₹25,20,000 will be your total investment and ₹10,67,944 will be the interest income. This makes the post office RD a safe and good option for long-term savings.
