Post Office RD Scheme: Invest Rs 10,000, earn up to Rs 7 lakh - know how

Post Office schemes are one of the safest investment options and they offer great returns.  Here we will discuss a post office saving scheme that has a maturity of 5 years. Under this scheme, some amount has to be deposited every month and a lump sum amount is received along with interest on maturity. Currently, the interest rate for the scheme is 5.8 per cent per annum, although it is compounded on a quarterly basis.

This is the Post Office's Recurring Deposits Scheme. A minimum of Rs 100 has to be deposited every month and beyond it, it can be multiples of 10.

The Post Office Recurring Deposit Account can open a single adult or can be opened jointly by three people. A guardian in the name of a minor and a minor above 10 years of age can also open this account. An individual can open several recurring accounts for oneself.

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.

If the account opening is between the 1st and 15th of the month, the money should be deposited in the account before the 15th every month. While,  if the account has been opened after the 15th of a month, the money should be deposited on the last working day of the month.

A default fee of Re 1 every month for every Rs 100 will be applied if the amount is not deposited by the due date. The point to note is that if you do not deposit the RD installment on time, you will have to pay a fine. 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.

If advance deposits are made in this scheme, some discounts are available. If advance deposits are made for six months, there will be a 10 per cent discount on the monthly premium. If someone deposits Rs 1,000 every month, he/she will have to deposit Rs 5,900 instead of 6,000 for six months. If he deposits a lump sum for a year, he will get a rebate of 40 per cent of the monthly premium. Thus, the total deposit for a year will be Rs 11,600 instead of Rs 12,000.

When it comes to loans, up to 50 per cent of the deposit can be availed after a year. It can be repaid in lump sum or installments. The interest rate will be 2 per cent separately on recurring deposit interest. This account is held for 5 years, but can be pre-maturely closed after 3 years.

According to the interest calculator, if you deposit Rs 10,000 in post office recurring deposits every month at the interest rate of 5.8 per cent currently available, your money will increase to Rs 6,96,967 on maturity. The total deposit in 5 years will be Rs 6 lakh and the interest amount will be Rs 99,967. Thus, the amount on maturity will be around Rs 7 lakh.