Post Office RD Scheme: Invest Rs 10,000, earn up to Rs 16 lakh; know how

If you don’t believe in taking risks when it comes to matters of money, Post Office schemes are the safer bet for you. Smaller investments fetch higher returns in many such schemes offered by the Post Office. One such scheme that helps you get great returns is the Post Office Recurring Deposit scheme.

What is the Post Office Recurring Deposit scheme?

This scheme is not only safe but also you can earn big by investing as little as just Rs 100 per month. However, there is no maximum limit to the amount that can be invested. Post office RD deposit account is a government guarantee scheme of depositing small installments with a better interest rate.

What is the interest rate on offer?

You have to open an RD account for a minimum of 5 years in the Post Office. Every quarter (at the annual rate), interest is calculated on the deposits. It is then added to your account with compound interest at the end of every quarter. According to the India Post Office website, an interest of 5.8 per cent interest is currently being paid on RD scheme. This new rate is applicable from July 1, 2020. The central government has announced interest rates every quarter in all its small saving schemes.

If you invest just Rs 10,000, you can get more than Rs 16 lakh

If you invest Rs 10,000 every month in the RD scheme of the post office, that too for 10 years, then it will get Rs 16.28 lakh on maturity. The point to note is that if you do not deposit the RD installment on time, you will have to pay a fine. If the installment is delayed, you will have to pay a penalty of one per cent every month. With this, if you do not deposit four consecutive installments, then your account will be closed. However, once the account is closed, it can be activated again for the next two months.

Accounts related to the RD scheme of the Post Office

The Post Office RD has the facility of both single account and joint account. A joint account can have a maximum of three adults. Names of children above 10 years of age can also be opened by the account guardian under his care. RD’s maturity is five years, but by applying before maturity, you can extend it for the next 5-5 years.

One can deposit at least Rs 100 per month in the RD account and the maximum amount in multiples of 10. A nomination facility is also available at the time of account opening. After three years from the date of opening the account, the facility of premature closure will be available. Interest rates change on a quarterly basis. The account can be transferred from one post office to another. The penalty has to be paid for not depositing on time. It will be 1 rupee per 100 rupees. There is also a facility to take a loan up to 50 per cent of the deposit after one year, which can be repaid outright with interest. There is also a facility to submit online through an IPPB saving account.