Post Office Scheme: Amidst market volatility, people often opt for investment avenues that offer safety and guaranteed returns. The Post Office Recurring Deposit (RD) scheme stands out as an excellent option for medium-term investment, providing impressive returns alongside a guarantee of safety. A key feature of this scheme is the flexibility to deposit as little as ₹100 per month, or any amount in multiples of ₹10, with no upper limit on the deposit.
Who can open an account?
Various categories of individuals can easily open either individual or joint accounts. Under the rules, residents of the country can open individual accounts in their own names. Additionally, up to three adults can open a joint account together. Joint accounts fall into two categories: ‘Joint A’ accounts, which are operated jointly by all account holders (or the survivor(s) in the event of a death), and ‘Joint B’ accounts, which can be operated individually by the account holders (or the survivor(s)).
Facilities are also available to open accounts for minors; a guardian can open an account on a minor’s behalf. Similarly, parents can open an account for a mentally unsound person—a category now referred to as an ‘authorised account’. Furthermore, minors aged 10 years or older can open an account in their name.
Understanding the RD account tenure
According to the rules governing RD accounts, the tenure is 5 years (or 60 monthly installments) from the date of opening. Upon completion of this period, account holders can extend their RD account for another 5 years. To avail of this option, one must submit an application at the post office. Additionally, even after maturity, you can keep the RD account active for up to five years without making any further deposits. During this period, you do not need to make additional deposits, yet the account remains active.
Returns on a monthly investment of ₹8,000
If you deposit ₹8,000 per month into a Post Office RD account, your investment will span five years (i.e., 60 months). The scheme currently offers an interest rate of 6.7%. Based on calculations, an investment of ₹8,000 for five years at 6.7% interest would yield a return of ₹90,926.63. Over these 60 months, you would deposit a total of ₹4.8 lakh. Consequently, combining the invested amount and the returns, you would accumulate a total fund of ₹570,926.63.