According to the website of the post office, any person can open his single account in this scheme. Apart from this, three adult people can also open a joint account together. This account can also be opened in the name of a minor who is above 10 years of age.
Post office and bank plans are the preferred option for those looking for a safe means of saving and investment. Such people prefer to invest money in Fixed Deposit (FD) or Recurring Deposit (RD) schemes. The problem with FDs comes that you need a huge amount in one go. In this case, RD becomes a more convenient option.
Talking about RD schemes, in this case it is beneficial to choose the post office as compared to banks. A post office scheme gives you the option to start saving with even Rs 100 and get more interest than banks.
We are talking about the National Savings Recurring Deposit Account of the Post Office. Under this scheme, if you want to open a recurring deposit account for five years, then it can be opened for as little as Rs 100. According to the information given on India Post, the benefit of compounding interest is available in this scheme. At present, interest is being given in this scheme at the rate of 5.8 percent per annum. The interest is calculated on a compounding basis every quarter. This means that the interest gets added to the principal after every quarter.
According to the website of the post office, any person can open his single account in this scheme. Apart from this, three adult people can also open a joint account together. This account can also be opened in the name of a minor who is above 10 years of age. If the child’s age is less than 10 years, then parents can open an account for him in this scheme. In this scheme, you can deposit a minimum of Rs 100 every month. There is no limit to the maximum amount you want to deposit.
You have to deposit every month before that date on which your account is opened. If you do not do this then your account will be made a default, which can be normalized by paying a small penalty. However, if you default for four consecutive months, the account will be closed. Even after this, the post office gives an additional time of 2 months to restart the account.
The special thing about this scheme is that you can take advantage of it even before maturity in case of sudden need. If you have paid 12 consecutive installments on time, then after 1 year you can take a loan equal to 50% of the balance in the account. Later the loan can be repaid in one go or in installments. The account can be closed before maturity at any time after the completion of three years. After maturity in 5 years, there is also a facility to extend it.
If you compare it with the leading banks, then the advantage is clearly visible. SBI, the largest public sector bank, gives interest from 5.1 percent to 5.5 percent on recurring deposits. If you look at the similar scheme of HDFC Bank, the largest in the private sector, then instead of Rs 100, Rs 1000 will be needed to open it. At the same time, this bank offers interest from 3.5 percent to 5.60 percent on the RD scheme. Similarly, ICICI Bank also gives interest from 3.5 percent to 5.60 percent on RD scheme.
