SBI RD vs Post Office RD: To get RD done, you can either go to the bank or if you want, go to the post office. Which of the two is better for you, you can understand it with an example.
SBI RD vs Post Office RD: After the increase in the repo rate, banks / financial institutions are increasing the rates of deposits. In such a situation, the craze for Recurring Deposits (RD) is increasing again among fixed income investors. These not only give a fixed return on investment but also do not have to worry about raising lump sum money and like mutual funds SIP, little by little, big capital can be made in the long run.
To get RD done, you can either go to the bank or if you want, go to the post office. Which of the two is better for you, you can understand it with an example. Let’s say that you have to create a capital of Rs 10 lakh in five years, then which is better, its details are being given below.
SBI RD
You can open an RD account with the country’s largest bank SBI for a period of 12 months to 120 days. It is necessary to invest at least Rs 100 in this every month. The bank gives interest at the rate of 5.45 percent to 5.65 percent on RD deposits, but senior citizens will get interest at the rate of 5.95 percent to 6.45 percent.
Now you want to create a capital of Rs 10 lakhs in 5 years and your age is less than 60 years, then you can make a capital of Rs 10.05 lakhs in five years by depositing Rs 14500 every month every month. On the other hand, senior citizens will get 0.50 percent more i.e. 6.10 percent interest, ie if they deposit Rs 14,300 every month, then in a period of five years, a capital of Rs 10.04 lakh will be ready.
Post Office RD
The post office RD is for five years. It requires an investment of at least Rs 100 per month. After depositing 12 installments, you can take a loan equal to 50 percent of the account amount and on this interest will have to be paid at the rate of two percent more than the rate of RD. Post office RD earns interest at the rate of 5.8 per cent, which keeps on depositing quarterly.
Senior citizens do not get additional interest in the post office. In this, if you deposit Rs 14400 every month for five years, then you can create a capital of Rs 10.03 lakh.
- Whom to choose in RD of SBI and Post Office
Talking about the better of both, if you are a senior citizen then it is better to get RD in bank and if you are less than 60 years then post office RD is better. However, keep in mind that both are not giving positive returns in terms of inflation. If you want to beat inflation, invest in options that offer more than 8 per cent interest, such as deposits in many small finance banks, where you can earn strong interest but the risk is high.
Highlights of RD
- Lump sum investment is not required and by making small deposits, you can create a large capital in a period.
- Its maturity period is usually 12 months to 10 years.
- Investment in this is safe as deposits and interest are insured up to a maximum of Rs 5 lakh under the provisions of the Deposit Insurance and Credit Guarantee Corporation (DICGC), whereas mutual funds and stocks have no such guarantee.
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