Post Office Recurring Deposit scheme offers guaranteed returns. It has a fixed interest rate of 6.7 per cent per annum compounded quarterly. One can have individual or joint account and can start investing with a minimum of Rs 100 a month. The lock-in period is five years (60 months). The Post Office scheme also provides loan facility. Know more about the guaranteed return scheme and what your Rs 25,000 monthly investment will turn into in five years.
Post Office RD: The first aim of an investor is to earn money through their investment, and their nightmare is to lose it amid market volatility. In such a scenario, any return that is guaranteed attracts investors, and that’s probably the reason the charm of various Post Office schemes offering guaranteed returns never dies down. In a bouquet of various Post Office schemes offering guaranteed returns, Recurring Deposit Account (RD) remains a popular investment option.
A large population in India seeking a return on their investment and a safe place to park their money finds RD a popular option. RD offers an interest rate of 6.7 per cent per year, and has a lock-in period of five years. One can deposit a minimum of Rs 100 or any amount in multiples of Rs 10. An RD account can also be opened at banks such as State Bank of India. Here we will show how much return you will get if you invest Rs 25000 a month (Rs 300000 a year and Rs 1500000 in five years) in a RD scheme. Before that, let’s go through some of the salient features of Post Office RD.
Post Office RD: Minimum and maximum investments
An RD accountholder has to deposit a minimum of Rs 100 or in multiples of Rs 10 in a month. There is no limit on the maximum deposit.
Post Office RD: Who can open an account?
An individual or up to 3 adults (Joint A or Joint B) can open the account.
A guardian can also open an account on behalf of a minor who is at least 10 years old.
Post Office RD: Interest Rate
The guaranteed return scheme offers an annual interest rate of 6.7 per cent, which is compounded quarterly.
Post Office RD: Advance Deposit
One can also make advance deposits for up to five years in the account. These advance deposits can be made at the time of opening of the account or any time later on.
Post Office RD: Loan
The investment scheme also offers loan facility.
After one has deposited 12 installments and their account is continued for one year, the investor can avail the facility up to 50 per cent of the balance credit in the account.
Post Office RD: Maturity
The maturity period for Post Office RD is 5 years (60 monthly deposits) from the date of opening the account. However, the account can be extended for another 5 years by giving an application at a post office.
This is how a fund of Rs 25 lakh will be created by saving ₹ 500 daily in Post Office RD.
You can save Rs 500 daily and put Rs 15000 (500×30) in Post Office RD every month.
According to RD Calculator, in 5 years you will be able to deposit a fund of Rs 10,70,492 lakh in this way. There will be interest income of Rs 1,70,492.
If you extend your account for 5 more years and keep depositing money, then in 10 years you will be able to deposit Rs 25,62,822. In this your investment will be Rs 18,00,000 and interest income will be Rs 7,62,822.
