You can start investing as little as Rs 100 per month in this post office scheme or you can invest any amount in multiples of 10.
If you invest in post office schemes, then post office recurring deposit can be very beneficial for you. At present, most of the common people trust the post office’s RD scheme more than banks. The post office is providing 6.2 percent interest to the customers for investing in the RD scheme. In this scheme, you can start investing as low as Rs.100 per month or you can invest any amount in multiples of 10.
There is no maximum limit on the amount you can invest in this scheme. Deposit in Post Office RD scheme matures in 5 years (after 60 monthly deposits) from the date of account opening. According to the post office website, customers can further extend the account for another 5 years by submitting an application to the concerned post office.
Explain that the post office RD account can be opened by an individual, jointly by up to 3 people, or by a minor above 10 years of age. If the depositor fails to make the scheduled deposit after one month, the default penalty is Re.1 per Rs.100. The account will be closed after 4 missed installments. The interest applicable to the account is the rate at which the account was originally opened.
Banks offer better RD rates
At present, the RD interest rates offered by some banks are higher than the post office RD rate. For example, SBI is offering 7.1% interest on RD scheme. While HDFC Bank is offering up to 7% interest rate for general citizens. Banks also allow RDs with short tenures of 1 to 5 years.
Calculate like this
- After a monthly contribution of Rs 5000 for the Post Office RD scheme, a fund of Rs 3.52 lakh will be formed in 5 years. If you extend the account for another 5 years, then the total fund in 10 years will be Rs.8.32 lakhs.
- After a monthly contribution of Rs 1000 for the Post Office RD scheme, there will be a fund of Rs 70,431 lakh in 5 years. If you extend the account for another 5 years, then the total fund in 10 years will be Rs 1.66 lakh.
- A monthly contribution of Rs 10,000 for the Post Office RD scheme will result in a corpus of Rs 7.04 lakh in 5 years. If you extend the account for another 5 years, then the total fund in 10 years will be Rs 16.6 lakh.
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