Post Office Recurring Deposit Scheme: Get big funds with small investments, know the latest interest rates and benefits

Post Office Recurring Deposit Scheme: The term of a Post Office Recurring Deposit (RD) is 5 years, or 60 months. However, it can be extended for another 5 years. Currently, this scheme offers an interest rate of 6.7% per annum.

Post Office Recurring Deposit Scheme: If you’re looking for a safe and guaranteed return investment, the Post Office Recurring Deposit (RD) can be an excellent option. This scheme encourages small savings, and you’ll have a substantial amount in your bank account upon maturity. This post office scheme, also known as the National Savings Recurring Deposit Account, is particularly beneficial for those who prefer to make small monthly savings rather than investing a large lump sum.

Interest Rate and Tenure

The term of a Post Office Recurring Deposit (RD) is 5 years, or 60 months. However, it can be extended for another 5 years. Currently, this scheme offers an interest rate of 6.7% per annum. The government adjusts this interest rate every three months. However, once the account is opened, the interest rate remains fixed for the entire term. Therefore, this scheme is considered risk-free.

What are the investment rules?

  • An account can be opened under this scheme with a minimum investment of just ₹100 per month.
  • There is no maximum investment limit in the scheme. Investors can deposit any amount per month as per their convenience.
  • Any Indian can open a Post Office Recurring Deposit (RD) account. It also offers the facility of a joint account.
  • Accounts can also be opened in the names of children above 10 years of age.
  • Keep in mind: if you fail to deposit your monthly installments on time, you may have to pay a penalty.

How much return will you get if you deposit Rs 50,000 per month over 5 years?

Suppose an investor deposits Rs 50,000 every month for 5 years at an interest rate of 6.7% per annum. The calculation would be as follows:

  • Monthly deposit amount – Rs 50,000 (Rs 6 lakh annually)
  • Investment period – 5 years
  • Total deposit – Rs 30,00,000
  • Annual interest rate – 6.7% (compounding)
  • Total interest earned – Rs 568,291
  • Finally earning – Rs 3568,291

Major Benefits of RD Schemes

  • Since it is a government scheme, the deposit amount and returns are guaranteed.
  • Interest is calculated every three months, allowing investors to benefit from “interest on interest” and grow their funds rapidly.
  • This account can be opened at any post office across the country.
  • A loan facility of up to 50% of the deposit amount is also available after one year of account opening.
  • The account can also be closed after three years from the date of opening, subject to certain conditions.
  • Post Office RD is an ideal option for investors who want to build a large corpus from a small amount in a fixed period of time.

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