If you want to convert small savings into a big fund in the future, then Post Office Recurring Deposit (RD) Scheme can be a great option for you. This government-guaranteed scheme not only makes your savings safe but also gives good returns with better interest rate.
What is Post Office RD Scheme?
Post Office RD Scheme is a fixed income scheme, where you can deposit a fixed amount every month.
You can start with a minimum of ₹ 100 per month and investment is possible up to ₹ 50,000 per month.
The duration of the scheme is 5 years, which can be extended for an additional 5 years.
The monthly deposit amount once chosen cannot be changed.
How much interest and return will you get?
This scheme offers an annual interest rate of 6.7%, which is compounded on a quarterly basis. If you deposit ₹3,000 every month, after 5 years you will get a total amount of about ₹2,14,097.
How is the calculation done?
Total investment: ₹1,80,000 (₹3,000 × 60 months)
Interest earned: ₹34,097
Maturity amount: ₹2,14,097
Can the account be closed before 5 years?
Although the tenure of this scheme is 5 years, it can be closed after 3 years under certain circumstances.
The interest rate may be reduced if the account is closed prematurely.
It would be better if you continue it for the full term so that you get more benefits.
Benefits of Post Office RD
Secured by the Government: This scheme is backed by the Department of Posts and the Government of India.
Better interest rate: It gives more interest than bank RD.
Big Funds from Small Investments: With monthly savings of just ₹3,000, you can build a good fund in 5 years.
Easy Process: To open it, one has to go to the nearest post office, where the process is simple and fast.
Frequently Asked Questions (FAQs)
Q1: Can I choose a deposit amount more than ₹100?
Yes, you can choose a monthly amount starting from ₹100 to ₹50,000.
Q2: What happens if you don’t deposit on time?
If you don’t deposit on time, the post office charges a nominal late fee and repeated delays may also lead to the account becoming inactive.
Q3: Who can avail this scheme?
All persons above 18 years of age can open it, whether individual or joint account.
Conclusion
If you want to get fixed and safe returns without any risk, then Post Office RD scheme is an ideal option for you. To travel from small investments to big funds, visit the nearest post office today and avail this scheme.