Post Office RD is a government investment scheme in which you have to deposit a fixed amount every month for 5 years. This is best for those who want guaranteed returns without any risk. After 5 years, you get the entire amount back with interest. But one small mistake of yours can turn this profit into a big loss. In the next slides, know which mistakes you should not make and what are the rules of this scheme.
Why is it the best investment option?
The biggest feature of this scheme is its safety and attractive interest rate. Currently, 6.7% annual interest is being given on Post Office RD, which is more than many bank FDs. This is a great way to convert small savings into a big amount.
This 1 mistake can cause a big loss
The biggest mistake that investors make is to break their RD before maturity (Premature Closure). If you need money and you close this account before the completion of 5 years, then you have to bear a huge loss.
How will your interest decrease?
According to the rule, if you close the RD pre-maturely, then instead of 6.7%, you will be given interest equal to Post Office Savings Account. Currently, only 4% interest is being given on savings account. That is, your interest will be reduced directly by 2.7%.
When can you break RD?
If very necessary, you can close it after 3 years from the date of opening the account. But remember, even if you close it a day before maturity, the interest rate will be applicable at 4% only. Therefore, unless there is a very big emergency, avoid breaking it.
What to do after 5 years? Or extension is a better option
If you do not need money after completion of 5 years, then you can extend this RD Account for the next 5 years. For this, you just have to give an application. The good thing is that the old interest rate of 6.7% will remain applicable on your extended account as well.
Who can open this account?
Any Indian citizen above 18 years of age can open this RD Account. Parents can also open this account in the name of their children. Apart from this, 2-3 people can also open a joint account together.
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