post office
In today's time, most of the people want such investment options where their money is safe and they also get good returns. In such a situation, the Recurring Deposit (RD) scheme of the post office is becoming people's choice. In this scheme, a big fund can be created in the long run through small savings.
Government guarantee, investment completely safe
The biggest feature of the Post Office RD Scheme is its security. This scheme comes with the guarantee of the Government of India, so the money invested in it is considered completely safe. Unlike the stock market or mutual funds, it is not affected by market fluctuations. This is the reason why risk-averse investors like it more.
What is the interest rate being received?
At present 6.7% annual interest is being given on Post Office RD. It also has the benefit of compounding interest, due to which returns increase rapidly over time. Investment in this scheme can be started with just Rs 100 per month.
Who can open an account?
Any adult person can open a post office RD account. Apart from this, parents can also open an account in the name of children above 10 years of age. After completing 18 years, the child can operate the account himself.
For how long will the investment have to be made?
The maturity period of Post Office RD is 5 years. However, if investors wish, they can extend it for further 5 years. If the account is opened between 1st and 15th of the month, then the installment has to be deposited by 15th of every month. Whereas in accounts opened after 16th, installment can be deposited till the last day of the month.
Loan facility available when needed
Investors also get loan facility in this scheme. If the account is at least 1 year old, then loan up to 50% of the deposited amount can be taken. The interest rate on this loan is only 2% more than the interest rate on RD. If needed, there is also an option to prematurely close the account after 3 years.
How will Rs 17 lakh be made?
If you save around Rs 333 daily, then Rs 10,000 will be invested in a month. If you deposit Rs 10,000 every month for 5 years, the total investment will be Rs 6 lakh. According to 6.7% interest, interest will be around Rs 1,13,659 and on maturity the total amount will be around Rs 7,13,659.
You will get big benefit from compounding
If you extend this investment for next 5 years, then the total deposited amount in 10 years will be Rs 12 lakh. Due to the benefit of compounding in the long term, the interest can increase to around Rs 5,08,546. In such a situation, after completion of 10 years, the total fund can become approximately Rs 17,08,546.
For whom is this scheme beneficial?
Post Office RD is a good option for those who want to gradually build a big fund from small savings. This scheme is considered especially beneficial for employed people, housewives and those who like safe investments.
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